Which stock has the most systematic risk

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Systematic versus Unsystematic Risk Consider the following information about Stocks I and II: Rate of return if state occurs State of Economy Probability of State of Economy Stock I Stock II Recession 0.15 0.11 -0.25 Normal 0.55 0.18 0.11 Irrational Exuberance 0.3 0.08 0.31 The market risk premium is 7.5 percent, and the risk-free rate is 4 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain.

Reference no: EM13276265

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