Problem 7-12 (Algo)

Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios:

Scenario	Probability	Market Return	Aggressive Stock	Defensive Stock
1	0.5	6%	2.1%	3.6%
2	0.5	16	25	10

Required:

a. What are the betas of the two stocks? (Round your answers to 2 decimal places.)

b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.) c. If the T-bill rate is 8%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)