Consider the following information on Stocks I and II:

State of

	Probability of			Rate of Return if State Occurs
Economy	State of Economy			Stock I				Stock II
Recession		.20				.010			.30
Normal		.55				.320			.22
Irrational exuberance		.25				.180			.40

The market risk premium is 11 percent, and the risk-free rate is 4 percent. Calculate the beta and standard deviation of Stock I. (Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to 2 decimal places, e.g., 32.16.)

	Stock I
Beta
Standard deviation			%

Calculate the beta and standard deviation of Stock II. (Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to 2 decimal places, e.g., 32.16.)

	Stock II
Beta
Standard deviation			%

Which stock has the most systematic risk?

	Stock I
	Stock II

Which one has the most unsystematic risk?

	Stock I
	Stock II

Which stock is riskier?

	Stock I
	Stock II