Consider the following information about Stocks and :

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
		Stock	Stock
Recession	0.15	0.20	-0.25
Normal	0.70	0.21	0.09
Irrational exuberance	0.15	0.06	0.44

The market risk premium is 7 percent, and the risk-free rate is 4 percent.

a) Which stock has the most systematic risk?

b) Which one has the most unsystematic risk?

c) Which stock is riskier? Explain.