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Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns Aggressive Stock Market Return 5% Defensive
Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns Aggressive Stock Market Return 5% Defensive Stock 6% 25 38 12 a. What are the betas of the two stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Beta Aggressive stock 2.00 Defensive stock 0.30 b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 25%? (Do not round intermediate calculations.) Expected Rate of Aggressive stock Defensive stock Return 18% 91%
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