In a recent tightly contested legal case, Vertex initiated a patent infringement lawsuit against

VertexPlus. The jury has returned with its verdict today. The rate of return on Vertex was

$r_V=3\mathrm{.}1\%.$ The rate of return on VertexPlus was a bit lower, at $r_{VP}=2\mathrm{.}5\%.$ Meanwhile,

the market responded positively to encouraging news about the unemployment rate, with

$r_M=3\%.$ The historical relationship between the stock returns of these companies and the

market portfolio has been previously determined through index model regressions:

Vertex :$,r_V=0\mathrm{.}2\%+1\mathrm{.}4r_M$

VertexPlus :$,r_{VP}=-0\mathrm{.}1\%+0\mathrm{.}6r_M$

Calculate the predicted returns, and abnormal returns for Vertex and VertexPlus.

Which company do you think won the lawsuit? Explain your answer.