The standard deviation on stock iis return is percent and


Consider the following information about Stocks I and II: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock I Stock II Recession .30 .04 ?.19 Normal .50 .16 .06 Irrational exuberance .20 .05 .39 The market risk premium is 8 percent, and the risk-free rate is 5 percent. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16. Enter your return answers as a percent. ) The standard deviation on Stock I's return is percent, and the Stock I beta is . The standard deviation on Stock II's return is percent, and the Stock II beta is . Therefore, based on the stock's systematic risk/beta, Stock is "riskier".

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Financial Management: The standard deviation on stock iis return is percent and
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