PS: I would prefer if the calculation is not done in excel.

9. Task You are given the following probability distributions, as well as the possible returns on stock A and B and the possible returns on the market portfolio. RiLB) Ri(p) Ri(A) Pi Economic Return on Return on Return on condition Probability stock A (7.) Stock B (z.) portfolio (1) Recession 0 25 -4 - 8 -lo Average 0,50 14 18 12 Above Average 0,25 20 26 28 a) Calculate beta coefficient for stock A and stock B. (12 marks) b) If the risk-free rate is 5% and the market risk premium is 6%, what is the required return for stock A and stock B by using CAPM? (4 marks) c) Risk-free securities have a beta equal to a) 0, b)1, c)1.2. (2 marks)