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Systematic versus Unsystematic Risk ( LO 3 ) Consider the following information about Stocks I and II: table [ [ , Rate of Return
Systematic versus Unsystematic Risk LO Consider the following information about Stocks I and II:
tableRate of Return if State Occurs,,State of Economy,Probability of State of Economy,Stock I,Stock IIRecessionNormalIrrationalexuberance
The market risk premium is and the riskfree rate is Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain.
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