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ICP 13-15. Consider the following information: State of Economy Probability Recession .25 Normal Irrational .5 .25 Exuberance Return Stock A .02 Return Stock B

ICP 13-15. Consider the following information: State of Economy Probability Recession .25 Normal Irrational .5 .25 Exuberance Return Stock A .02 Return Stock B -.25 .21 .09 .06 .44 The MRP is 8%, the risk-free is 4%. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is riskier? Explain

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