Consider the following two scenarios for the economy and the expected returns in each scenario for...

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Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. Rate of Return Scenario Market Bust 15 Aggressive Stock A Defensive Stock D 36 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 5%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. Note: Enter your answers as a whole percent. Expected Rate of Return Market portfolio Stock A Stock D 40% < Required A Required C > () Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D If the T-bill rate is 5%, what does the CAPM say about the fair expected rate of return on the two stocks? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Expected Rate of Return Stock A 3.12% Stock D 3.62 x 96 < Required B Required D > Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. Rate of Return Scenario Market Bust 15 Aggressive Stock A Defensive Stock D 36 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 5%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. Note: Enter your answers as a whole percent. Expected Rate of Return Market portfolio Stock A Stock D 40% < Required A Required C > () Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D If the T-bill rate is 5%, what does the CAPM say about the fair expected rate of return on the two stocks? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Expected Rate of Return Stock A 3.12% Stock D 3.62 x 96 < Required B Required D >