Two assets with the same total risk can have very different systematic risks Suppose that the market volatility ( M ) is 20 and that Stock 1 and Stock 2 have the following characteristics Stock Business Market beta Residual variance 1 Oil company 0 5 0 20 2 Telecommunications 1 5 0 12 The percentage of the systematic risk out of the total risk for Stock 1 is closest to The percentage of the systematic risk out of the total risk for Stock 2 is closest to

Question: Two assets with the same total risk can have very different systematic risks. Suppose that the market volatility ( M ) is 20% and that

Two assets with the same total risk can have very different systematic risks.
Suppose that the market volatility (σ_M) is 20% and that Stock 1 and Stock 2 have the following characteristics:

Stock	Business	Market beta	Residual variance
1	Oil company	0.5	0.20
2	Telecommunications	1.5	0.12

The percentage of the systematic risk out of the total risk for Stock 1 is closest to _______;

The percentage of the systematic risk out of the total risk for Stock 2 is closest to _______.

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