Rate of Return if State Occurs 7:45 Probability of State of State of Economy Economy Stock...

Transcribed Image Text:

Rate of Return if State Occurs 7:45 Probability of State of State of Economy Economy Stock I Stock II Recession 25 .06 -.29 Normal 45 21 .09 Irrational exuberance .30 15 49 Mc Graw H Q 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.) F1 The standard deviation on Stock I's return is deviation on Stock II's return is stock's systematic risk/beta, Stock @ 2 W F2 800 F3 #3 $ 4 Answer is not complete. 6.24 percent, and the Stock I beta is 30.28 percent, and the Stock II beta is is "riskier". 0.55 1.19 X The standard Therefore, based on the < Prev 7 of 10 Next > MacBook F5 F6 % 005 6 & 7 F7 E R T Y U F8 * * 8 9 F9 Rate of Return if State Occurs 7:45 Probability of State of State of Economy Economy Stock I Stock II Recession 25 .06 -.29 Normal 45 21 .09 Irrational exuberance .30 15 49 Mc Graw H Q 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.) F1 The standard deviation on Stock I's return is deviation on Stock II's return is stock's systematic risk/beta, Stock @ 2 W F2 800 F3 #3 $ 4 Answer is not complete. 6.24 percent, and the Stock I beta is 30.28 percent, and the Stock II beta is is "riskier". 0.55 1.19 X The standard Therefore, based on the < Prev 7 of 10 Next > MacBook F5 F6 % 005 6 & 7 F7 E R T Y U F8 * * 8 9 F9