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In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on
In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on Apex was 'A-3796. The rate of return on Bpex was only rs* 3.3%. The market today responded to very encouraging news about the unemployment rate, and -3.4%. The historical relationship between returns on these stocks and the m arket portfolio has been estimated from index model regressions as: Apex: rA-0.3% + 1.5rM Bpex: rB -0.1% + 0.5rM a. what is the predicted returns for Apex & ????? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Predicted Returns Apex ???? b. Which company do you think won the lawsuit? O Apex
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