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Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock 3.36 33

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Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock 3.36 33 Defensive Stock 5.19 20 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Answer is complete and correct. Beta A Beta D 2.28 0.68 b. What is the expected rate of return on each stock if the market return is equally likely to be 7% or 20%? (Round your answers to 2 decimal places.) Answer is complete and correct. 18.15 Rate of return on A Rate of return on D 9 % % .55 Answer is complete and correct. Rate of return on A Rate of return on D 18.15 9.55 % % c. If the T-bill rate is 8%, and the market return is equally likely to be 7% or 20%, what are the alphas of the two stocks? (Negati values should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to 2 decimal places.) Answer is not complete. Alpha A Alpha D (241) Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock 3.36 33 Defensive Stock 5.19 20 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Answer is complete and correct. Beta A Beta D 2.28 0.68 b. What is the expected rate of return on each stock if the market return is equally likely to be 7% or 20%? (Round your answers to 2 decimal places.) Answer is complete and correct. 18.15 Rate of return on A Rate of return on D 9 % % .55 Answer is complete and correct. Rate of return on A Rate of return on D 18.15 9.55 % % c. If the T-bill rate is 8%, and the market return is equally likely to be 7% or 20%, what are the alphas of the two stocks? (Negati values should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to 2 decimal places.) Answer is not complete. Alpha A Alpha D (241)

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