Problem 5 Intro We know the following expected returns for stocks A and B, given different states of the economy State (s) Probability E(rAErB Recession Normal Expansion 0.2 -0.03 0.05 0.5 0.12 0.08 0.3 0.2 0.12 The expected return on the market portfolio is 0.06 and the risk-free rate is 0.02. Part 1 What is the standard deviation of returns for stock A? Attempt 1/10 for 10 pts 3+ decima Submit Attempt 1/10 for 10 pts Part 2 What is the standard deviation of returns for stock B7 4+ decima Submit Part 3 What is the beta for stock A? 8 Attempt 1/10 for 10 pts 2+ decima Submit Part 4 BPAttempt 1/10 for 10 pts. What is the beta for stock B7 Submit }" Part 4 What is the beta for stock B Attempt 1 /10 for 10 pts. 2+ decima Submit Part 5 Which stock has more total risk? 1~ Attempt 1 /8 for 4 pts. The stock with the higher standard deviation The stock with the lower standard deviation " The stock with the higher beta The stock with the lower beta Part 6 Which stock has more systematic risk? 11 -Attempt 1 /8 for 4 pts. The stock with the higher standard deviation The stock with the higher beta " The stock with the lower beta The stock with the lower standard deviation