A1 Question 17 (4points): Question 17 (4points): Classify the following events as mostly systematic or mostly unsytematic. The Federal Reserve's decision to raise interest rates to curb inflation and slow down economic growth The litigation and regulatory risks faced by Smith Pharmaceuticals due to undisclosed side effects of their newly released drug threaten the company's financial stability, market reputation, and future prospects. Interest rate a company pays on its short-term debt borrowing is increased by its bank A sudden public relations crisis triggers a product recall in a retail company Question 18 (6 points): You must show your work to be given credit. Do not use hard values in your calculations. You are provided the following information on the two stocks: \begin{tabular}{|r|c|c|c|} \hline State & Probability & Stock I & Stock II \\ \hline Recession & 15.00% & 5.00% & 21.00% \\ \hline Boom & 70.00% & 18.00% & 10.00% \\ \hline & & & \\ \hline \end{tabular} 1. Calculate the Expected Return, Standard Deviation, and Beta for each stock. 2. Which stock has more systematic risk and which one has more unsystematic risk? Which stock is "riskier"? Explain your answer completely