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S13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II: Rate of Return If State Occurs Probability of State of Economy Recession State of Economy Stock I Stock Il 15 03 23 Normal 70 20 09 Irrational 15 08 43 exuberance The market risk premium is 7 percent, and the risk-free rate is 3.5 percent. (Round your answers to 2 decimal places, e.g., 32.16.) The standard deviation on Stock I's return is percent, and the Stock I beta is deviation on Stock Il's return is percent, and the Stock II beta is stock's systematic risk/beta, Stock is riskier. The standard Therefore, based on the