Consider the following information on Stocks I and II:

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
		Stock I	Stock II
Recession	.21	.015	?.31
Normal	.56	.325	.23
Irrational exuberance	.23	.185	.41

The market risk premium is 11.1 percent, and the risk-free rate is 4.1 percent.

	Stock I
Beta		0.03
Standard deviation		33.52%

	Stock II
Beta		0.02
Standard deviation		8.01%

Requirement:

(a)	Which stock has the most systematic risk?
(b)	Which one has the most unsystematic risk?
(c)	Which stock is