What is the Stock II Beta?

Consider the following information about Stocks I and II: Rate of Return If State Occurs Stock Stock II State of Economy Recession Normal Irrational exuberance Probability of State of Economy .30 40 .30 .10 .17 - 25 12 .11 .45 The market risk premium is 8 percent, and the risk-free rate is 3 percent. (Do not round Intermediate calculations. Enter your standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Round your beta answers to 2 decimal places, e.g., 32.16.) The standard deviation on Stock I's return is deviation on Stock Il's return is stock's systematic riskbeta, Stock Answer is complete but not entirely correct. 321 percent, and the Stock I beta is 1.26 The standard 27.13 percent, and the Stock Il betais 0.98 Therefore, based on the is riskler