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An economy has two scenarios: boom or bust. The returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock

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An economy has two scenarios: boom or bust. The returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D are in this chart. a-1. Find the beta of each stock. (Round your answers to 2 decimal places.) a-2. Which stock is more defensive? is considered to be a more defensive stock than a-2. Which stock is more defensive? a-2. Which stock is more defensive? \begin{tabular}{|l|l|l|l|l|l} \hline & is considered to be a more defensive stock than & sensitive to the return of the overall mar................... \\ \hline because its return is & D A \end{tabular} a-2. Which stock is more defensive? \begin{tabular}{|l|l} \hline & is considered to be a more defensive stock than \\ because its return is \end{tabular} b. If each scenario is equally likely, calculate the expected rate of return on the market portfolio and on each stock. (Round your percentage answer to the nearest whole percent.) c. If the Treasury bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? (Round your percentage answers to 1 decimal place.) d. Which stock seems to be a better buy based on your answers to (a) through (c)

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