Problem. Suppose there is a risk free asset in the economy that gives a return of r = 1 percent, and that market returns are given by the following table: Market Probability Return 0.3 0.3 0.4 ear ormal Bull 2% There are two available securities, call them A and B, with the following returns under the different market conditions: SecurityBear |Normal Bull -5% | 4% | 13% -6% 3% 20% (a) Explain what alpha and beta measure in one sentence each (b) What are the expected returns of the market and each security? What are the excess returns? (c) What is the variance of the market? (d) What are the covariances of each security with the market? (e) What is the calculated beta for each security