Please clearly label the answers to 1-a,

1-b, 2-a, 2-b, and 3

Consider the following information on Stocks I and II: Rate of Return If State Occurs Probability of State of Economy .25 .30 Stock State of Economy Recession Normal Irrational exuberance Stock II .04 .30 - 23 .14 .45 .24 .40 The market risk premium is 13 percent, and the risk-free rate is 4 percent. 1-a. What is the beta of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Beta Stock 1 Stock 11 1-b. Which stock has the most systematic risk? Stock 1 Stock II 2-a. What is the standard deviation of each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Stock ! Stock II Standard Deviation % % -s 2-b. Which one has the most unsystematic risk? Stock Stock 11 3. Which stock is "riskier"? Stock 1 Stock