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Consider the following information on Stocks I and II: Probability of Rate of Retum if State State of Occurs State of Economy Economy Stock Stock

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Consider the following information on Stocks I and II: Probability of Rate of Retum if State State of Occurs State of Economy Economy Stock Stock | Recession Normal Irrational 45 exuberance The market risk premium is 7 percent, and the risk-free rate is 4 percent. a. Calculate the beta of each stock. (Do not round intermediate caldalations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. Which stock has the most systematic risk? d. Which one has the most unsystematic risk? e. Which stock is "riskier"? b. Lalculate le standard deviduori ol EDT SOCR. (06 hot rouna int calculations and enter your answers as a percent rounded to 2 32.16.) c. Which stock has the most systematic risk? d. Which one has the most unsystematic risk? e. Which stock is "riskier"? a. Stock I beta Stock II beta Stock I standard deviation Stock Il standard deviation More systematic risk d. More unsystematic risk e. "Riskier" stock

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