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Consider the following information on Stocks I and II: State...

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Finance

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 .010 .30
Normal .55 .320 .22
Irrational exuberance .25 .180 .40

The market risk premium is 11 percent, and the risk-free rate is 4 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 %

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