You are given the following information about Stock 1 and Stock 2. Rate of Return if State Occurs State of Economy Probability of State of Economy Stock 1 Stock 2 Recession Normal Boom 0.25 0.5 0.25 0.11 0.29 0.13 -0.4 0.10 0.56 The market risk premium is 8% and the risk-free rate is 4%. Use an appropriate computing tool to help you work out the following. Calculate the expected returns of Stock 1 and Stock 2. (11) Appraise which stock has the higher systematic risk. (iii) Compute the total risk of each stock. Appraise which stock is riskier. (b) Discuss whether a risky asset can have a negative beta and what the CAPM predicts about its return