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Consider the Following Probability Distribution for Stocks a and B

Question 5

Multiple Choice

Consider the following probability distribution for stocks A and B:  State  Probability  Return on Stock A Return on Stock E 10.1010%8%20.201387830.201286840.301489850.201588%\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock A}& \text { Return on Stock E } \\1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 138 & 78 \\3 & 0.20 & 128 & 68 \\4 & 0.30 & 148 & 98 \\5 & 0.20 & 158 & 8 \%\end{array}
The expected rates of return of stocks A and B are _____ and _____, respectively.


A) 13.2%; 9%
B) 14%; 10%
C) 13.2%; 7.7%
D) 7.7%; 13.2%

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