Calculate beta and standard deviation of stock

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Consider the following information on Stocks I and II: State of Probability of Rate of Return if State Occurs Economy State of Economy Stock I Stock II Recession .20 .045 − .25 Normal .65 .345 .17 Irrational exuberance .15 .205 .45 The market risk premium is 11.5 percent, and the risk-free rate is 4.5 percent. Calculate the beta and standard deviation of Stock I. (Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to 2 decimal places, e.g., 32.16.) Stock I Beta Standard deviation % Calculate the beta and standard deviation of Stock II. (Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to 2 decimal places, e.g., 32.16.) Stock II Beta Standard deviation.

Reference no: EM131531642

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