Consider the following information about Stocks I and II:

State of Economy Probability of State of Economy Rate of Return if State Occurs

Stock I Stock II

Recession $\mathrm{.}30\mathrm{.}08\mathrm{.}27$

Normal $\mathrm{.}45\mathrm{.}19\mathrm{.}14$

Irrational exuberance $\mathrm{.}25\mathrm{.}13\mathrm{.}47$

The market risk premium is $8$ percent, and the risk$-$free rate is $6$ percent.

$($The rest is like the other questions$)$