Question: Standard Deviation Stock I % Stock II % Consider the following information on Stocks I and II: Rate of Return if State Occurs Stock I

Standard Deviation Stock I % Stock II % Consider the following

	Standard Deviation
Stock I		%
Stock II		%

Consider the following information on Stocks I and II: Rate of Return if State Occurs Stock I State of Economy Recession Normal Irrational exuberance Probability of State of Economy .40 .40 . 20 . 05 .22 Stock II -.17 14 32 . 16 The market risk premium is 11 percent and the risk-free rate is 5 percent. a-1. What is the beta of each stock? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Beta Stock I Stock

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