Consider the following information on Stocks I and II:

		Rate of Return if State Occurs
State of Economy	Probability of State of Economy	Stock I	Stock II
Recession	.45	.05	-.16
Normal	.40	.23	.14
Irrational exuberance	.15	.17	.33

The market risk premium is 12 percent and the risk-free rate is 3 percent.

a-1. What is the beta of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a-2. Which stock has the most systematic risk?

b-1. What is the standard deviation of each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Consider the following Information on Stocks I and II: Rate of Return if State Occurs State of Economy Recession Normal Irrational exuberance Probability of State of Economy .45 .40 . 15 Stock I .05 .23 .17 Stock II -. 16 . 14 .33 The market risk premium is 12 percent and the risk-free rate is 3 percent. 8-1. What is the beta of each stock? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Beta Stock Stock II a-2. Which stock has the most systematic risk? Stock I Stock Il b-1. What is the standard deviation of each stock? (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Standard Deviation Stock % Stock