Question: What is correct answer ? You are comparing stock A to stock 3. Given the following information, which one of these two stocks should you

What is correct answer ?

What is correct answer ? You are comparing stock
You are comparing stock A to stock 3. Given the following information, which one of these two stocks should you prefer and why? State of the Economy Probability of the State of the Economy Return on Stock A Return on Stock B Boom 70% 15% 9% Bust 30% -8% 6% 'A. A; because it has an expected return which is 0.3 percent higher than stock B O B. ; because it has an expected return of 8.4 percent O C. B; because it has the same return as stock A and is less risky O D. B; because it has a higher expected return than stock A O E. A; because it has highest possible return

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