$13$

Consider the following information on Stocks I and II:

$10$

points

Skipped

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References

State of Economy State of Recession Normal Irrational exuberance

Rate of Return if State $0$ccurs

Stock I Stock II

$\mathrm{.}045$

$-\mathrm{.}25$

$\mathrm{.}345$

$\mathrm{.}17$

$\mathrm{.}205$

$\mathrm{.}45$

The market risk premium is $11\mathrm{.}5$ percent, and the risk$-$free rate is $4\mathrm{.}5$ percent.

a$.$ Calculate the beta and standard deviation of Stock I.

Note: Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

b$.$ Calculate the beta and standard deviation of Stock II$.$

Note: Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

c$.$ Which stock has the most systematic risk?

d$.$ Which one has the most unsystematic risk?

e$.$ Which stock is "riskier"?

$\backslash$table$[[$a$.$ Beta,,$],[$Standard deviation,,$],[$b$.$ Beta,,$\%$