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Consider the following information about Stocks I and II: 10 points Rate of Return If State Occurs State of Economy Recession Normal Irrational Probability of

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Consider the following information about Stocks I and II: 10 points Rate of Return If State Occurs State of Economy Recession Normal Irrational Probability of State of Economy 15 .70 Stock I .23 09 43 Stock I eBook 03 .20 Print References 15 .08 exuberance The market risk premium is 7 percent, and the risk-free rate is 3.5 percent. (Round your answers to 2 decimal places, e.g., 32.16.) The standard The standard deviation on Stock I's return is deviation on Stock II's return is stock's systematic risk/beta, Stock percent, and the Stock I beta is percent, and the Stock II beta is is riskier. Therefore, based on the

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