(d) Peter would like to invest in the U.S share market. Consider the following table, which gives a security analysts expected return on two stocks in two particular scenarios for the rate of return on the market:

Market Return	Aggressive Stock	Defensive Stock
6%	-3%	8%
22%	40%	11%

The probability of the pessimistic (optimistic) scenario is 90% (10%) and the risk-free rate is 3%. What is the equation of SML and the alphas for the aggressive and defensive stock? Please keep 2 decimals in your answer. [5 marks]