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How to do this is lie Unsystematic Risk [LO3] Consider the following information Systematic versne y about Stocks I and II: Probability of State of

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is lie Unsystematic Risk [LO3] Consider the following information Systematic versne y about Stocks I and II: Probability of State of Economy State of Economy Recession Normal Irrational exuberance Rate of Return If State Occurs Stock Stock 11 .02 .09 -25 .50 .25 .06 The market risk premium is 7 percent, and the risk-free rate is 4 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain

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