Problem 12-14 Expected Returns (LO2) 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 Market Stock A Stock D -5% 25 15 Scenario Bust Boom Book rences Required: s. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Find the beta of each stock. (Round your answers to 2 decimal places.) Berta Stock Stock D 0.59 n. Problem 12-14 Expected Returns (L02) 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. points Rate of Return Aggressive Defensive Market Stock A Stock D =7% -10% -5% 19 25 15 Scenario Bust Boom ebook Print Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? References Complete this question by entering your answers in the tabs below. Required A Required B Required Required D 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.) Expected Rate of Return % Market portfolio Stock A Stock D % % m. Problem 12-14 Expected Returns (LO2) 11.11 points 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 Market Stock A Stock D -10% -5% 19 25 15 Scenario Bust Boom eBook Print Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? References Complete this question by entering your answers in the tabs below. Required A Required B Required Required D If the T-bill rate is 4%, 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.) Expected Rate of Return % Stock A Stock D % 3 Problem 12-14 Expected Returns (LO2) 11.11 points 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 Market Stock A Stock D - 10% =-5% 19 25 15 Scenario Bust Boom eBook Print Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? References Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Better buy