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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 8% 3.0%

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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 8% 3.0% 20 31 Defensive Stock 4.8% 14 a. What are the betos of the two stocks? (Round your answers to 2 decimal places.) Bota A Beta D 2331 0.77 b. What is the expected rate of return on each stock if the market return is equally likely to be 8% or 20%? (Round your answers to 2 decimal places.) Rate of return on A Rate of retum on D 17 001% 9.40% c. If the T-bill rate is 7%, and the market return is equally likely to be 8% or 20%, 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.) 14 67 Alpha Alpha

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