You Are Comparing Stock a to Stock B A) 525 Percent
B) 1

question 69

Multiple Choice

You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities? $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock A } & \text { Stock B }\end{array}\\\text { Normal } & .75 & \begin{array}{ll}.13 & \quad \quad .16\end{array} \\\text { Recession } & .25 &\begin{array}{ll} -05 & \quad \quad - . 21\end{array}\end{array}$$

---

Definitions:

Cross of Gold Speech

An address by William Jennings Bryan at the 1896 Democratic National Convention, criticizing the gold standard and supporting bimetallism, which became a symbol of the populist movement.

William Jennings Bryan

A prominent American lawyer and politician who was a major advocate for populism, serving in the U.S. Congress and running for President as the Democratic Party nominee in 1896, 1900, and 1908.

Gold Standard

A monetary system in which the value of a country's currency is directly linked to a specified amount of gold.

Retina

The light-sensitive layer of tissue at the back of the inner eye, which transmits visual signals to the brain via the optic nerve.