Consider the Following Probability Distribution for Stocks C and D

Consider the following probability distribution for stocks C and D: $\begin{array}{cccc}\underline{\text { State }} &\underline{ \text { Probability }} &\underline{ \text { Return on Stock C} } &\underline{ \text { Return on Stock D} } \\1 & 0.30 & 7 \% & -9 \% \\2 & 0.50 & 11 \% & 14 \% \\3 & 0.20 & -16 \% & 26 \%\end{array}$

-The expected rates of return of stocks C and D are _____ and _____,respectively.

A) 4.4%; 9.5%
B) 9.5%; 4.4%
C) 6.3%; 8.7%
D) 8.7%; 6.2%
E) none of the above

Correct Answer:

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