7 Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and...
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7 Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II: points Rate of Return if State Occurs eBook Probability of State of State of Economy Economy Stock I Stock Il Recession .25 .05 Normal .45 .20 -.36 .08 Irrational exuberance .30 .11 .46 Hint Print References The market risk premium is 8 percent, and the risk-free rate is 4 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 II's return is 13.55 percent, and the Stock I beta is 30.20 percent, and the Stock II beta is stock's systematic risk/beta, Stock I is "riskier". 33.00The standard 8.40 Therefore, based on the 7 Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II: points Rate of Return if State Occurs eBook Probability of State of State of Economy Economy Stock I Stock Il Recession .25 .05 Normal .45 .20 -.36 .08 Irrational exuberance .30 .11 .46 Hint Print References The market risk premium is 8 percent, and the risk-free rate is 4 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 II's return is 13.55 percent, and the Stock I beta is 30.20 percent, and the Stock II beta is stock's systematic risk/beta, Stock I is "riskier". 33.00The standard 8.40 Therefore, based on the
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