Question: 2. We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(As) E(Tb,s) Recession 0.2

2. We know the following expected returns for stocks A and

2. We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(As) E(Tb,s) Recession 0.2 -0.1 0.03 Normal 0.5 0.08 0.05 Expansion 0.3 0.12 0.07 a. What is the expected return for stock A? b. What is the expected return for stock B

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