Consider the following information about Stocks I and II:

				Rate of Return if State Occurs
State of	Probability of
Economy	State of Economy			Stock I			Stock II
Recession		.25			.02			.33
Normal		.45			.30			.13
Irrational exuberance		.30			.08			.53

The market risk premium is 8 percent, and the risk-free rate is 5 percent. (Do not round intermediate calculations. Enter your standard deviation answers as a percent rounded to 2 decimal places and round your beta answers to 2 decimal places, e.g., 32.16.)

The standard deviation on Stock I's expected return is percent, and the Stock I beta is . The standard deviation on Stock II's expected return is percent, and the Stock II beta is . Therefore, based on the stock's systematic risk/beta, Stock (Click to select)III is "riskier".

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