Question: 7 Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns Market Return 78 14 Aggressivo
7 Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns Market Return 78 14 Aggressivo Stock 2.78 29 Defensive Stock 4.54 10 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) OR Beta A Beta nt ances b. What is the expected rate of return on each stock if the market return is equally likely to be 7% or 14%? (Round your answers to 2 decimal places.) Rate of retum on A Rate of retum on D c. If the T-bill rate is 8%, and the market return is equally likely to be 7% or 14%, 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.)
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