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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
| 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 | .25 | .06 | .29 |
| Normal | .45 | .21 | .09 |
| Irrational exuberance | .30 | .15 | .49 |
| The market risk premium is 8 percent, and the risk-free rate is 4 percent. (Do not round intermediate calculations. Enter your standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Round your beta answers to 2 decimal places, e.g., 32.16.) |
Consider the following information about Stocks I and II: The market risk premium is 8 percent, and the risk-free rate is 4 percent. (Do not round intermediate calculations. Enter your standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Round your beta answers to 2 decimal places, e.g., 32.16.) Step by Step Solution
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Personal Finance
Authors: Elizabeth B. Goldsmith
1st Edition
0534544959, 9780534544959
