The market risk premium is 11 percent, and the risk-free rate is 6 percent.

1(a)

What is the beta of each stock? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

1(b)

Which stock has the most systematic risk?

2(a)

What is the standard deviation of each stock? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

2(b)

Which one has the most unsystematic risk?

3.	Which stock is riskier?

Consider the following information on Stocks I and I: Rate of Return If State Occurs Probability of State of Economy State of Economy Stock Stock II Recession Normal Irrational exuberance 40 .25 .35 .03 .34 .28 .18 14