Question: Given the data below on the return for security D and the return on the market, what is the beta for security D relative to
Given the data below on the return for security D and the return on the market, what is the beta for security D relative to the market? If the risk-free rate is 4.36%, what is the expected rate of return on security D?
| Joint Probability | Return on Security D | Return on the Market |
| 5/20 = .25 | 8% | 6% |
| 5/20 = .25 | 10% | 10% |
| 4/20 = .20 | 11% | 9% |
| 2/20 = .10 | 15% | 10% |
| 4/20 = .20
| 19% | 11%
|
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