In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back...

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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 3.6%. The rate of return on Bpex was only rg = 3.2%. The market today responded to very encouraging news about the unemployment rate, and M = 3.2%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: A = 0.3% + 1.4rM Bpex: rg = -0.1% + 0.4rM a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Apex Bpex = Predicted Returns Apex Bpex % % b. Which company do you think won the lawsuit? 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 3.6%. The rate of return on Bpex was only rg = 3.2%. The market today responded to very encouraging news about the unemployment rate, and M = 3.2%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: A = 0.3% + 1.4rM Bpex: rg = -0.1% + 0.4rM a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Apex Bpex = Predicted Returns Apex Bpex % % b. Which company do you think won the lawsuit?

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