The market risk premium is 8 percent, and the risk-free rate is 3 percent. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16. Enter your return answers as a percent. )

6. value: 10.00 points Consider the following information about Stocks I and II: Rate of Return If State Occurs State of Economy Recession Normal Irrational exuberance Probability of State of Economy .30 40 Stock / .10 .17 .11 Stock 11 - 25 .12 .45 30 The market risk premium is 8 percent, and the risk-free rate is 3 percent. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16. Enter your return answers as a percent. ) The standard deviation on Stock I's return is standard deviation on Stock Il's return is based on the stock's systematic risk/beta, Stock percent, and the Stock I beta is percent, and the Stock Il beta is is "riskier". 1.26 . The 0.975. Therefore, eBook & Resources eBook: 13.7. The Security Market Line Check my work 2021 McGraw-Hill Education. All righ reserved