Problem $9-9$

Consider the following table, which gives a security analyst's expected return on two stocks in two particular scenarios for the rate of return on the market:

a$.$ What are the betas of the two stocks? $($Do not round intermediate calculations. Round your answers to $2$ decimal places.$)$

b$.$ What is the expected rate of return on each stock if the two scenarios for the market return are equally likely to be $\backslash (6\backslash \%\backslash )$ or $\backslash (22\backslash \%\backslash )?($Do not round intermediate calculations. Round your answers to $1$ decimal place.$)$

e$.$ What hurdle rate should be used by the management of the aggressive firm for a project with the risk characteristics of the defensive firm's stock if the two scenarios for the market return are equally likely? Also, assume a T$-$Bill rate of $4\backslash \%.($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Hurdle rate