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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 Defensive Stock

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns:

Market Return Aggressive Stock Defensive Stock
7% 2.7% 4.5%
14 29 10

a.

What are the betas of the two stocks? (Round your answers to 2 decimal places.)

Beta A
Beta D

b.

What is the expected rate of return on each stock if the market return is equally likely to be 7% or 14%? (Round your answers to 2 decimal places.)

Rate of return on A %
Rate of return on D %

d.

If the T-bill rate is 8%, and the market return is equally likely to be 7% or 14%, 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 %
My answers: Betas: 3.76 0.79 Rate of Return: 15.85% 7.25% Alphas: 2.21% -0.93% I can't get the Alpha values right. Please help me out...

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