Question: 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

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 - 3.28. The rate of return on Bpex was only rg - 2.6. The market today responded to very encouraging news about the unemployment rate, and ry = 3%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: FA - 0.31 + 1.4IM Bpex: rg - -0.11 + 0.6FM a. What is the predicted returns for Apex & Bpex? (Do not round Intermediate calculations. Round your answers to 1 decimal place.) + Predicted Returns % Apex Bpex % b. Which company do you think won the lawsuit? Apex O Bpex

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