Question: Problem 10 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Probability

Problem 10 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Probability E(TA,s) E(TM,s) Recession 0.3 -0.03 0.02 Normal 0.5 0.12 0.05 Expansion 0.2 0.2 0.09 The risk-free rate is 0.02. Attempt 1/10 for 10 pts. Part 1 Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit

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