Consider the following information about Stocks I and II: Rate of Return If State Occurs State...
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Consider the following information about Stocks I and II: Rate of Return If State Occurs State of Probability of Economy State of Economy Recession 15 Stock I .03 Stock Il Normal Irrational exuberance .70 .20 -23 .09 15 .08 .43 The market risk premium is 7 percent, and the risk-free rate is 3.5 percent. (Round your 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 risk/beta, Stock Answer is complete but not entirely correct. 6.78 percent, and the Stock I beta is 18.08 percent, and the Stock Ill beta is 1.34 1.71 x The standard Therefore, based on the Iis riskier. Consider the following information about Stocks I and II: Rate of Return If State Occurs State of Probability of Economy State of Economy Recession 15 Stock I .03 Stock Il Normal Irrational exuberance .70 .20 -23 .09 15 .08 .43 The market risk premium is 7 percent, and the risk-free rate is 3.5 percent. (Round your 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 risk/beta, Stock Answer is complete but not entirely correct. 6.78 percent, and the Stock I beta is 18.08 percent, and the Stock Ill beta is 1.34 1.71 x The standard Therefore, based on the Iis riskier.
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