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13. Consider the following information about stock1 and stock2. State of Probability of Rate of return if state occurs Economy State of Stock 1 Stock
13. Consider the following information about stock1 and stock2. State of Probability of Rate of return if state occurs Economy State of Stock 1 Stock 2 Economy Boom 0.15 0.20 -0.25 Normal 0.70 0.21 0.09 Burst 0.15 0.06 0.44 The market risk premium is 7%, and the risk-free rate is 4%. Which stock has the most systematic risk? Which stock has the most unsystematic risk? Which stock is riskier"? Explain
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