6 points Check my work 1 Consider the following table, which gives a security analyst's expected...
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6 points Check my work 1 Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: eBook Scenario 1 Probability 0.5 Market Return 8% Aggressive Stock 3.4% Defensive Stock 5.2% 2 0.5 20 32 15 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Print Beta A Beta D 2.38 0.81 References b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D 17.70% 10.10% c. If the T-bill rate is 7%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Alpha A Alpha D % % 6 points Check my work 1 Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: eBook Scenario 1 Probability 0.5 Market Return 8% Aggressive Stock 3.4% Defensive Stock 5.2% 2 0.5 20 32 15 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Print Beta A Beta D 2.38 0.81 References b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D 17.70% 10.10% c. If the T-bill rate is 7%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Alpha A Alpha D % %
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