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Chapter 7 A Saved Help Save & Exit Submit Check my work 6 Problem 7-12 (Algo) 10 points Consider the following table, which gives a
Chapter 7 A Saved Help Save & Exit Submit Check my work 6 Problem 7-12 (Algo) 10 points Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: Scenario Probability 0.5 0.5 Aggressive Stock 3.68 26 Market Return 8% 20 eBook Defensive Stock 5.4% 12 References Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A Beta D Check my work 6 b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) Rate of return on A 10 points % % Rate of return on D eBook References c. If the T-bill rate is 7%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) % Alpha A Alpha D %
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