Consider the Following Probability Distribution for Stocks a and B

question 62

Multiple Choice

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock A}&\text {Return on Stock E } \\1 & 0.10 & 10 \% & 8 \% \\2 & 0.20 & 138 & 78 \\3 & 0.20 & 128 & 68 \\4 & 0.30 & 148 & 98 \\5 & 0.20 & 158 & 8 \%\end{array}$ The variances of stocks A and B are _____ and _____, respectively.

• A) 1.5%; 1.9%
• B) 2.2%; 1.2%
• C) 3.2%; 2.0%
• D) 1.5%; 1.1%