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4.) Consider the expected return for two stocks in two different market conditions: 6 pts Market Return 8% 20% Aggressive Stock 5% 34% Defensive Stock
4.) Consider the expected return for two stocks in two different market conditions: 6 pts Market Return 8% 20% Aggressive Stock 5% 34% Defensive Stock 6% 14% a. What are the betas of the two stocks? b. What is the expected rate of return on each stock if the market return is equally likely to be 8% or 20%? c. What are the alphas of each? 4.) Consider the expected return for two stocks in two different market conditions: 6 pts Market Return 8% 20% Aggressive Stock 5% 34% Defensive Stock 6% 14% a. What are the betas of the two stocks? b. What is the expected rate of return on each stock if the market return is equally likely to be 8% or 20%? c. What are the alphas of each
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