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QUESTION
The probability of a recession has increased to 30% and the probability for a normal state of economy is now 40%. The market risk premium has
The probability of a recession has increased to 30% and the probability for a normal state of economy is now 40%. The market risk premium has increased by 1% as well. Which statement is true? Select all that apply:Stock II has more risk than Stock I Stock II has less systematic risk than Stock I Stock I has a lower risk premium than Stock II Stock I has a lower expected return than Stock II
