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

Market Return		Aggressive Stock		Defensive Stock
5	%	2	%	6	%
25		38		12

a. What are the betas of the two stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 25%? (Do not round intermediate calculations. Round your answers to 1 decimal place.)

e. What hurdle rate should be used by the management of the aggressive firm for a project with the risk characteristics of the defensive firms stock if market return is equally likely to be 5% or 25%? Also, assume a T-Bill rate of 6%