i Use the following information for the next two problems: At this time, a T-bill has a 1% rate, the market's expected return is 11%, Stock A has a beta of 1.15, and Stock B has a beta of 1.05. The expected returns for Stocks A and B have the following probability distributions: State of the Economy Below average Average Above average Calculate the expected rate of return for Stock B. a. 9.00 percent b. 11.50 percent C. 12.70 percent d. 11.00 percent 12.50 percent e. Probability 0.30 0.50 0.20 Stock A -15% 13 35 Stock B -12% 15 44

Use the following information for the next two problems: At this time, a T-bill has a 1% rate, the market's expected return is 11%, Stock A has a beta of 1.15 , and Stock B has a beta of 1.05. The expected returns for Stocks A and B have the following probability distributions: Calculate the expected rate of return for Stock B. a. 9.00 percent b. 11.50 percent c. 12.70 percent d. 11.00 percent e. 12.50 percent