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 expected rates of return of stocks A and B are _____ and _____, respectively.

A) 13.2%; 9%
B) 14%; 10%
C) 13.2%; 7.7%
D) 7.7%; 13.2%

Probability Distribution

A statistical function that describes the likelihood of occurrence of different possible outcomes for an experiment.

Expected Rates of Return

The projected rate of earnings from an investment, based on the potential outcomes and their probabilities, mirroring the concept of expected return with emphasis on various investments.

Stocks A and B

Generally refers to different classes of stocks a company might offer, with each class having distinct rights, privileges, or voting powers.