problem 10

Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Probability Eras) E(TM,s) Recession 0.3 -0.02 0.02 Normal 0.5 0.13 0.05 Expansion 0.2 0.21 0.09 The risk-free rate is 0.02. Part 1 IB- Attempt 1/10 for 9 pts. Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit