Question: Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: Probability E(ra,s) E(rm,s) State (s)

Intro We know the following expected returns for stock A and

Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: Probability E(ra,s) E(rm,s) State (s) Recession Normal 0.2 -0.05 0.05 0.5 0.1 0.08 Expansion 0.3 0.18 0.12 The risk-free rate is 0.02. Part 1 Attempt 1/3 for 10 pts. Assuming the CAPM holds, what is the beta for stock A? k+ decimals

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