Over the period of 1955-2006

        long-term government bonds underperformed large corporate stocks. 
       
small-company stocks underperformed large-company stocks. 
        inflation exceeded the rate of return on U.S. Treasury
bills. 
        U.S. Treasury bills outperformed long-term government bonds. 

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 I has more overall risk than Stock II 
        Stock
II has less systematic risk than Stock I 
        Stock I has a higher risk premium than Stock II 
        None of the
above are correct statements