Question: Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return 5% 21 Aggressive Stock

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return 5% 21 Aggressive Stock 2.4% 27 Defensive Stock 4.2% 18 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A Beta D b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 21%? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D c. If the T-bill rate is 7%, and the market return is equally likely to be 5% or 21%, 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
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