Consider the following table, which gives a security analyst$$s expected return on two stocks and the market index in two scenarios:

Scenario Probability Market Return Aggressive Stock Defensive Stock

Good Economy $0\mathrm{.}58\%3\mathrm{.}8\%5\mathrm{.}0\%$

Bad Economy $0\mathrm{.}520\%32\%15\%$

a$.$ What are the betas of the two stocks $($Aggressive stock and Defensive stock$)$ based on CAPM? $($Hint: assume CAPM holds for good economy as well as bad economy and then you can solve for beta of each stock. Remember beta is the sensitivity of the stock's return to the market return. Please check the learning tips of explaining another way to explain the estimation of beta for week $3.)$

b$.$ What is the expected rate of return on each stock?

c$.$ If the T$-$bill rate is $7\%,$ what are the alphas of the two stocks if analyst$$s expected return is the realized return?