Consider the following information on Stocks I and II:

Rate of Return If State Occurs

Probability of

State of Economy State of Economy Stock I Stock II

Recession $\mathrm{.}20\mathrm{.}04-\mathrm{.}16$

Normal $\mathrm{.}25\mathrm{.}32\mathrm{.}14$

Irrational exuberance $\mathrm{.}55\mathrm{.}26\mathrm{.}42$

The market risk premium is $9$ percent, and the risk$-$free rate is $6$ percent.

$1($a$)$

What is the beta of each stock? $($Negative amounts should be indicated by a minus sign. Round your answers to $2$ decimal places.$)$

Beta

Stock I

Stock II

$1($b$)$

Which stock has the most systematic risk?

multiple choice $1$

Stock II

Stock I

$2($a$)$

What is the standard deviation of each stock? $($Round your answers to $2$ decimal places. Omit the $"\%"$ sign in your response.$)$

Standard deviation

Stock I

$\%$

Stock II

$\%$

$2($b$)$ Which one has the most unsystematic risk?

multiple choice $2$

Stock II

Stock I

$3.$ Which stock is $$riskier$?$

multiple choice $3$

Stock I

Stock II

rev: $04\_20\_2016\_$QC$\_$CS$-49512$