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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