Consider the following table, which gives a security analyst's
expected return on two stocks for two...
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Finance
Consider the following table, which gives a security analyst'sexpected return on two stocks for two particular marketreturns:
Market Return
Aggressive Stock
Defensive Stock
6.76
%
3.76
%
2.01
%
21.26
30.51
13.76
Required:
(a)
What are the betas of the two stocks? (Round youranswers to 2 decimal places.)
Beta A
Beta D
(b)
What is the expected rate of return on each stock if the marketreturn is equally likely to be 6.76% or 21.26%? (Round youranswers to 2 decimal places. Omit the "%" sign in yourresponse.)
Rate of return on A
%
Rate of return on D
%
(c)
What is the expected rate of return for the market, if theT-bill rate is 9.76%, and the market return is equally likely to be6.76% or 21.26%? (Round your answer to 2 decimal places.Omit the "%" sign in your response.)
Expected rate of return
%
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