Question
Darren has the option of investing in either Stock A or Stock B. The probability of...
Darren has the option of investing in either Stock A or Stock B. The probability of the return of Stock A being 25% is 0.45, 14% is 0.25, and 4% is 0.30. The probability of the return of Stock B being 30% is 0.30, 9% is 0.25, and 2% is 0.45. Given the probability distributions for the two investments, what is the expected rate of return for Stock A and Stock B? a. 15.95%; 12.15% b. 15.95%; 11.45% c. 14.75%; 13.75% d. 13.65%; 12.85% e. 17.82%; 11.95%
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