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

Intro We know the following expected returns for stocks A and B. given different states of the economy: State (s) Probability E(rAs) E(rs,s) Recession 0.2 0.5 0.11 -0.04 0.02 0.05 Normal Expansion 0.3 0.19 0.09 BAttempt 1/10 for 10 pts. Part 1 What is the expected return for stock A? 3+ decimals A? =(probability of rec in) + (probability of 2.3 0.19) 7.70%

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