The market risk premium is 8 percent and the risk-free rate


Consider the following information on Stocks I and II:

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The market risk premium is 8 percent, and the risk-free rate is 5 percent. Which stock has the most systematic risk?

Which one has the most unsystematic risk? Which stock is "riskier"?Explain.

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Finance Basics: The market risk premium is 8 percent and the risk-free rate
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