Consider the following table, which gives a security analyst's expected return on two stocks and the...

 

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Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: Aggressive Defensive Scenario Probability Market Return Stock 1 2 0.5 0.5 8% 20 3.9% 30 Stock 5.7 % 14 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A Beta D 2.18 0.69 b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D 16.95% 9.85 % c. If the T-bill rate is 8%, 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 % % Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: Aggressive Defensive Scenario Probability Market Return Stock 1 2 0.5 0.5 8% 20 3.9% 30 Stock 5.7 % 14 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A Beta D 2.18 0.69 b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) Rate of return on A Rate of return on D 16.95% 9.85 % c. If the T-bill rate is 8%, 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 % %