14. Expected Returns. 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. (LO12-2) Rate of Return Scenario Defensive Stock D Bust Boom Market 8% 32 Aggressive Stock A -10% 38 -6% 24 a. Find the beta of each stock. In what way is stock D defensive? 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 parts (a), (b), and (c)