Please assist with helping to clarify answers to the following questions.

Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D.

Rate of Return

Aggressive Defensive

Scenario Market Stock A Stock D

Bust -7% -9% -5%

Boom 29 35 20

a.Find the beta of each stock. (Round your answers to 2 decimal places.)

b.If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. (Enter your answers as a whole percent.)

c.If the T-bill rate is 5%, what does the CAPM say about the fair expected rate of return on the two stocks? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

d.Which stock seems to be a better buy on the basis of your answers to (a) through (c)?