MetaConsider the following table, which gives a security analyst's expected return on two stocks in two particular scenarios for the rate of return on the market:

Market Return Aggressive Stock Defensive Stock

$6\%3\%4\%$

$223512$

Required:

a$.$ What are the betas of the two stocks?

b$.$ What is the expected rate of return on each stock if the two scenarios for the market return are equally likely?

e$.$ 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 market return is equally likely to be $6\%$ or $22\%?$ Also, assume a T$-$Bill rate of $4\%.$