The market risk premium is 8 percent and the risk-free rate is 4 percent. (Do not round intermediate calculations. Enter the standard deviations as a percent and round all answers to 2 decimal places, e.g., 32.16.) The standard deviation on Stock I's expected return is Stock I beta is percent, and the The standard deviation on Stock II's expected return is Therefore, based percent, and the Stock II beta is on the stock's systematic risk/beta, Stock is "riskier". State of Economy Probability of State of Economy Rate of Return if State Occurs Stock I Stock II Recession .30 .09 -.24 Normal .45 .16 .11 Irrational exuberance .25 .10 .44