Question: Problem 11-20 In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of

Problem 11-20 In a recent closely contested lawsuit, Apex sued Bpex

Problem 11-20 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 A = 3.4%. The rate of return on Bpex was only B = 2.8%. The market today responded to very encouraging news about the unemployment rate, and = 3%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: A 0.48 + 1.2 M Bpex: rg-0.18 +0.4FM a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Predicted Returns % Apex %

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