8 Problem 12-14 Expected Returns (LO2) 10 points 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 Aggressive Defensive Market Stock A Stock D -8% - 13% -6% 26 35 19 Scenario Bust Boom eBook Print 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)? References Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Find the beta of each stock. (Round your answers to 2 decimal places.) Beta Stock A Stock D CRONESIA Required B > MA Saved 8 Problem 12-14 Expected Returns (LO2) 10 points 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 Aggressive Defensive Market Stock A Stock D -8% - 13% -6% 26 35 19 Scenario Bust Boom eBook Print 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)? References 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 std, 6. (Enter your answers as a whole percent.) Expected Rate of Return % Market portfolio Stock A Stock D % % 8 Problem 12-14 Expected Returns (LO2) 10 points 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 Aggressive Defensive Market Stock A Stock D -8% - 13% -6% 26 35 19 Scenario Bust Boom eBook Print 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)? References 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? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected Rate of Return % Stock A Stock D % Saved 8 Problem 12-14 Expected Returns (LO2) 10 points 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. Scenario Bust Boom eBook Rate of Return Aggressive Defensive Stock A Stock D -13% --6% 35 19 Market -8% 26 Print 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)? References Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Better buy