Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns. What is Beta for the aggressive stock? round your answer to two decimals. (hint: Beta of 1 means if market change by 10% the stock is also change by 10%)

Continued: What is the expected rate of return for the defensive stock if the market return is equally likely to be 5% or 20%? (hint: expected return is weighted average of returns) round your answer to two decimals like 2.54%

Continued: If the T-bill rate is 8%, and the market return is equally likely to be 5% or 20%, draw the SML for this economy. Plot the two securities on the SML graph. What are the alphas of each?

\begin{tabular}{ccc} \hline Market Retum & Aggressive Stock & Defenstve Stock \\ \hline 5% & 2% & 3.5% \\ 20 & 32 & 14 \\ \hline \end{tabular} \begin{tabular}{ccc} \hline Market Retum & Aggressive Stock & Defenstve Stock \\ \hline 5% & 2% & 3.5% \\ 20 & 32 & 14 \\ \hline \end{tabular}