Consider the following information about Stocks I and II: Rate of Return if State Occurs Probability...
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Consider the following information about Stocks I and II: Rate of Return if State Occurs Probability of State of- State of Economy Economy Stock I Stock II Recession .20 .09 -.26 Normal .60 .18 .13 Irrational exuberance .20 .12 .46 The market risk premium is 5 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 Il's return is stock's systematic risk/beta, Stock percent, and the Stock I beta is percent, and the Stock II beta is The standard Therefore, based on the is "riskier". Consider the following information about Stocks I and II: Rate of Return if State Occurs Probability of State of- State of Economy Economy Stock I Stock II Recession .20 .09 -.26 Normal .60 .18 .13 Irrational exuberance .20 .12 .46 The market risk premium is 5 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 Il's return is stock's systematic risk/beta, Stock percent, and the Stock I beta is percent, and the Stock II beta is The standard Therefore, based on the is "riskier".
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