Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II:...
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Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II: Rate of Return if State Occurs Probability of State of- State of Economy Recession Economy Stock I .30 .05 Stock II -30 Normal .45 .22 .10 Irrational exuberance .25 .05 .50 The market risk premium is 6 percent, and the risk-free rate is 2 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.) S 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 is "riskier". The standard . Therefore, based on the Problem 13-26 Systematic versus Unsystematic Risk [LO3] Consider the following information about Stocks I and II: Rate of Return if State Occurs Probability of State of- State of Economy Recession Economy Stock I .30 .05 Stock II -30 Normal .45 .22 .10 Irrational exuberance .25 .05 .50 The market risk premium is 6 percent, and the risk-free rate is 2 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.) S 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 is "riskier". The standard . Therefore, based on the
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