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Consider the following information about Stocks I and II: Rate of Return if State Occurs State of Economy Recession Normal Irrational exuberance Probability of State
Consider the following information about Stocks I and II: Rate of Return if State Occurs State of Economy Recession Normal Irrational exuberance Probability of State of Economy .25 .45 .30 Stock / .08 .20 .09 Stock // .23 .10 .43 The market risk premium is 8 percent, and the risk-free rate is 6 percent. (Do not round intermediate calculations and round your final 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 Il's expected return is percent, and the Stock Il beta is Therefore, based on the stock's systematic risk/beta, Stock (Click to select) vis "riskier
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