Question: Q4.Last year, Rocket Inc. earned a ( + )% return (= 5 and =6). Farmers Corp. earned ( + /2)%. The overall market return last

Q4.Last year, Rocket Inc. earned a ( + )% return (= 5 and =6). Farmers Corp. earned ( + /2)%. The overall market return last year was 15%, and the risk-free rate was 1.75%. If Rocket stock has a beta (CAPM) of 0.8 and Farmers has a beta (CAPM) of 1.5,

a. Rockets expected return is _________%. (Enter as a percentage and round to one decimal place.)

b. Farmers expected return is _________%. (Enter as a percentage and round to one decimal place.)

c. Which stock performed better once you take risk into account? Why?

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