What are the betas of the two stocks

Reference no: EM132206327

Question - Consider the following table, which gives a security analysts expected return on two stocks for two particular market returns:

Market Return	Aggressive Stock	Defensive Stock
6%	2.0%	5.0%
20	32	15

a. What are the betas of the two stocks?

b. What is the expected rate of return on each stock if the market return is equally likely to be 6% or 20%?

c. If the T-bill rate is 7%, and the market return is equally likely to be 6% or 20%, what are the alphas of the two stocks?

Reference no: EM132206327

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