Question: - In a recent closely contested lawsuit, Apex sued Bpex for patent infringement over the last month. In the last month, the market excess return

- In a recent closely contested lawsuit, Apex sued Bpex for

- In a recent closely contested lawsuit, Apex sued Bpex for patent infringement over the last month. In the last month, the market excess return was RM = 0.5%, while the excess returns on Apex and Bpex were RA = 0.7% and RB = 0.8%, respectively. The historical relationship between returns (%) on these stocks and the market index has been estimated from SIM as: Apex: TA Bpex: TB 0.1% + 0.6FM 0.3% +1.4rM Suppose further that the risk-free rate in the last month was rf = 0.5%. Which company do you think will win the lawsuit? State your answer with reasons

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