Question: Question 10 7 pts Answer the question based on the information below: State of Economy Probability Stock A's return Stock B's return Boom .4 15%

Question 10 7 pts Answer the question based on the information

Question 10 7 pts Answer the question based on the information below: State of Economy Probability Stock A's return Stock B's return Boom .4 15% -30% Recession .6 5% 40% Which of the following statements is true? Stocks A and B are positively correlated. O Stock A has higher total risk than stock B. The actual return of stock A will always be greater than that of stock B. Stock B has lower expected return than stock A. O A risk neutral (one who does not care about risk) investor will prefer stock B to stock A

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