Calculate the beta and standard deviation of stock

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Reference no: EM13762885

Consider the following information on Stocks I and II: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock I Stock II Recession .24 .030 ?.34 Normal .59 .340 .26 Irrational exuberance .17 .200 .44 The market risk premium is 11.4 percent, and the risk-free rate is 4.4 percent. Requirement 1: (a) Calculate the beta and standard deviation of Stock I. (Do not round intermediate calculations. Enter the standard deviation as a percentage. Round your answers to 2 decimal places (e.g., 32.16).) Stock I Beta Standard deviation % (b) Calculate the beta and standard deviation of Stock II. (Do not round intermediate calculations. Enter the standard deviation as a percentage. Round your answers to 2 decimal places (e.g., 32.16).) Stock II Beta Standard deviation % Requirement 2: (a) Which stock has the most systematic risk? (b) Which one has the most unsystematic risk?

Reference no: EM13762885

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