Question: = 3.2% In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of

= 3.2% In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on Apex was rA = 3.6%. The rate of return on Bpex was only rs The market today responded to very encouraging news about the unemployment rate, and rm = 3.2%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: ra = 0.3% + 1.4rm Bpex: r = -0.1% + 0.4rm a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) | Apex Bpex Predicted Returns % % b. Which company do you think won the lawsuit? O Apex Bpex
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