16. 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 rA  3.1%. The rate of return on Bpex was only rB  2.5%. The market today responded to very encouraging news about the unemployment rate, and rM  3%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as:

Apex:

Bpex:

r r r r A M B M

 

 

. % .

. % .

2 14 1 6 Based on these data, which company do you think won the lawsuit?