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Lonsider the following table, which gives a security onglyst's expected return on two stocks in two porticular scenarios for the rate of eturn on the
Lonsider the following table, which gives a security onglyst's expected return on two stocks in two porticular scenarios for the rate of eturn on the market What are the betas of the two stocks? (Do not round Intermedlate calculations. Round your answers to 2 decimal places.) What is the expected rate of return on each stock if the two scenarios for the market return are equally likely to be 7% or 21% ? (Do hot round intermediate calculations. Round your answers to 1 decimal place.) 2. What hurdle rate should be used by the management of the aggressive firm for a project with the risk characteristics of the defensive firm's stock if the two scenarios for the market return are equally likely? Also, assume a T-Bill rate of 7%. (Do not round ntermedlate calculations. Round your answer to 2 decimal places.)
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