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Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a

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Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. scenario Bust Boom Rate of Heturn Aggressive Defensive Market Stock Stock D -70 27 35 19 Required: a. Find the beta of each stock b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock c. If the T-biltrate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required Required Required Bewe Ir the T-bill rate is 4%, the CAPM say about the fair expected rate of return on the two stocks (Do not round intermediate calculations, Enter your answers as a percent rounded to 2 decimal places.) Expected Rate of Return Stock A Stock Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. Scenario Bust Boom Rate of Return Aggressive Defensive Market Stock Stock D -50 -30 27 35 19 -76 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Find the beta of each stock. (Round your answers to 2 decimal places.) Beta Stock Stock D Required B >

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