Consider the following table which gives a security


Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock Defensive Stock 6% 2.8% 4.6% 15 28 10 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A 2.8 Beta D 0.6 b. What is the expected rate of return on each stock if the market return is equally likely to be 6% or 15%? (Round your answers to 2 decimal places.) Rate of return on A 15.4 % Rate of return on D 7.3 % d. If the T-bill rate is 7%, and the market return is equally likely to be 6% or 15%, 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.) Alpha A % Alpha D %

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Financial Management: Consider the following table which gives a security
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