11 Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. 176 points Rate of Return Aggressive Defensive Scenario Market Stock A Stock D Bust -9% -8% Boom 32 40 27 -12% Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required Required Required Required D Find the beta of each stock. (Round your answers to 2 decimal places.) Beta Stock A Stock D Required B > Saved 11 Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. 176 points Rate of Return Aggressive Defensive Scenario Market Stock A Stock D Bust -9% -12% -8% Boom 32 40 27 Required: a. Find the beta of each stock. b. If each scenario is equally likely find the expected rate of return on the market portfolio and on each stock c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. D Required Required Required Required A B If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. (Enter your answers as a whole percent.) Expected Rate of Return Market 98 portfolio Stock A Stock D K Required Required > elsel Saved 11 Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. 176 points Rate of Return Aggressive Defensive Scenario Market Stock A Stock D Bust -9% 12% -8% Boom 32 40 27 Required: a. Find the beta of each stock b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required Required Required Required A B La D If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Show less Expected Rate of Return Stock A 90 Stock D 90 Saved 11 Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. 176 points Rate of Return Aggressive Defensive Scenario Market Stock A Stock D Bust -9% -12% --8% Boom 32 40 27 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required Required Required Required B Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Better buy