Rate of Return
Scenario	Market	Aggressive Stock A	Defensive Stock D
Bust	8%	10%	6%
Boom	27	41	20

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 percent rounded to 2 decimal places.)

	Expected Rate of Return
Market portfolio	%
Stock A	%
Stock D	%

If the T-bill rate is 5%, 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	%