Consider the Following Information The Market Risk Premium Is 7

question 80

Multiple Choice

Consider the following information:  $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock A } & \text { Stock B }\end{array}\\\text { Recession } & .04& \begin{array}{ll}.097& \quad \quad .102\end{array} \\\text { Normal} & .72& \begin{array}{ll}.114& \quad \quad .133\end{array} \\\text { Boom } & .24 & \begin{array}{ll}.156 & \quad \quad.148\end{array} \\\end{array}$$
The market risk premium is 7.4 percent, and the risk-free rate is 3.1 percent. The beta of Stock A is ________ and the beta of Stock B is ________.

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Definitions:

Major Organic Product

In a chemical reaction, the organic product that is formed in the greatest quantity, often the focus of synthesis and prediction in organic chemistry.

Short Synthesis

A concise and efficient synthetic process for producing compounds, often desirable in organic chemistry for its time and resource efficiency.

Butanoic Acid

An organic compound with the formula C4H8O2, also known as butyric acid, characterized by its unpleasant smell and occurrence in butter and animal fat.

Bromoacetone

An organic compound with the formula C3H5BrO, used in the past as a tear gas.