Question: Homework 4 Saved Help Save & Exit Submit 2 In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back

Homework 4 Saved Help Save & Exit Submit 2 In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on Apex was ra = 3.8%. The rate of return on Bpex was only rB = 3.4%. The market today responded to very encouraging news about the unemployment rate, and 'M= 3.4%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: ra = 0.3% + 1.2rM points 10 points Bpex: rb = -0.1% + 0.6FM a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) eBook Predicted Returns % Apex Bpex Print % References b. Which company do you think won the lawsuit? Apex Bpex

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