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

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=3.2%. The market today responded to very encouraging news about the unemployment rate, and rM=3.4%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: rA=0.4%+1.5rM Bpex: rB=0.1%+0.8rM Required: a. What is the predicted returns for Apex \& Bpex? b. Which company do you think won the lawsuit? Complete this question by entering your answers in the tabs below. What is the predicted returns for Apex \& Bpex? Note: Do not round intermediate calculations. Round your answers to 1 decimal place

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