Consider the following information:

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
Recession	.15	.13
Normal	.49	.15
Boom	.36	.34

Required:

Calculate the expected return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Expected return

%

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	.23	.060	.28
Normal	.68	.360	.20
Irrational exuberance	.09	.220	.48

The market risk premium is 11.8 percent, and the risk-free rate is 4.8 percent.

Requirement 1:

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

	Stock I
Beta
Standard deviation		%

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

	Stock II
Beta
Standard deviation		%