Question: Consider the following table, which gives a security analysts expected return on two stocks and the market index in two scenarios: Scenario Probability Market Return

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

Scenario	Probability	Market Return	Aggressive Stock	Defensive Stock
1	0.5	5%	2%	3.5%
2	0.5	20	32	14

Required:

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

b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.)

c. If the T-bill rate is 8%, what are the alphas of the two stocks? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 1 decimal place.)

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