Consider the following information on stocks i and iirate, Ask an Expert

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Consider the following information on Stocks I and II:

Rate of Return if State Occurs State of Economy / Probability of State of Economy / Stock I / Stock II

Recession 0.11 0.05 -0.25

Normal 0.18 0.19 0.45

Irrational Exuberance .71 .25 .27

The market risk premium is 14 percent, and the risk-free rate is 8.4 percent.

For standard deviations: (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

For betas: (Round your answers to 2 decimal places. (e.g., 32.16))

The standard deviation on Stock I's expected return Is ? percent and the Stock I beta is ?. The standard deviation on Stock II's expected return is percent, and the Stock II beta is ?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91608111

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