Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.15 & 8 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.15 & 12\%& 6\% \
4 & 0.30 & 14\%& 9\% \
5 & 0.20 & 16\% & 11 \%
\end{array}$
The expected rates of return of stocks A and B are _____ and _____, respectively.
A) 13.2%; 9%
B) 13%; 8.4%
C) 13.2%; 7.7%
D) 7.7%; 13.2%

Question

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.15 & 8 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.15 & 12\%& 6\% \
4 & 0.30 & 14\%& 9\% \
5 & 0.20 & 16\% & 11 \%
\end{array}$
 The expected rates of return of stocks A and B are _____ and _____, respectively.
A) 13.2%; 9%
B) 13%; 8.4%
C) 13.2%; 7.7%
D) 7.7%; 13.2%

Quizplus · Accepted Answer

The Answer of Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}
\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \
1 & 0.15 & 8 \% & 8 \% \
2 & 0.20 & 13\% & 7\% \
3 & 0.15 & 12\%& 6\% \
4 & 0.30 & 14\%& 9\% \
5 & 0.20 & 16\% & 11 \%
\end{array}$
 The expected rates of return of stocks A and B are _____ and _____, respectively.
A) 13.2%; 9%
B) 13%; 8.4%
C) 13.2%; 7.7%
D) 7.7%; 13.2%

Consider the Following Probability Distribution for Stocks a and B