Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, and aggressive stock A, and a defensive stock D. A. Find the beta of each stock...

Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, and aggressive stock A, and a defensive stock D.

A. Find the beta of each stock

B. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock.

C. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks?

D. Which stock seems to be a better buy on the basis of your answers to (a) through (c).

Extracted text: Help Save & Consider the following two scenarios for the economy and the expected returns in each scenarilo for the market portfollo, a aggressive stock A, and a defensive stock D. Rate of Return Aggressive Defensive Stock A -128 Scenario Market -98 32 Stock D Bust Boom 88- 27 40 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Find the beta of each stock. (Round your answers to 2 decimal places.) Beta Stock A Stock D Required B