$10$

Consider the following information on Stocks I and II:

$10$ points

Skipped

References

References

$\backslash$table$[[,$Probability of State of$,$Rate of Return,if State Occurs$],[$State of Economy,Economy,Stock I,Stock II$],[$Recession$,0\mathrm{.}40,0\mathrm{.}04,-0\mathrm{.}22],[$Normal$,0\mathrm{.}30,0\mathrm{.}29,0\mathrm{.}14],[$Irrational$,0\mathrm{.}30,0\mathrm{.}23,0\mathrm{.}39],[$exuberance$,,,]]$

The market risk premium is $12$ percent and the risk$-$free rate is $4$ percent.

a$-1.$ What is the beta of each stock?

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[,$Beta$],[$Stock I,$],[$Stock II$,]]$

a$-2.$ Which stock has the most systematic risk?

$$ Stock I

$$ Stock II

b$-1.$ What is the standard deviation of each stock?

Note: Do not round intermediate calculations. Enter your answers as a percent