Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns:

Market Return 8% 20

Aggressive Stock 3.5% 26

Defensive Stock 5.3% 10

a. What are the betas of the two stocks? (Round your answers to 2 decimal places.)

Beta A = 1.88

Beta D= 0.39

b. What is the expected rate of return on each stock if the market return is equally likely to be 8% or 20%? (Round your answers to 2 decimal places.)

Rate of return on A %=

Rate of return on D %=

d. If the T-bill rate is 8%, and the market return is equally likely to be 8% or 20%, 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 %=