Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns:

Market Return

8%

20

Aggressive Stock

3.0%

31

Defensive Stock

4.8%

14

a. What are the betas of the two stocks? (Round your answers to 2 decimal places.)

Beta A = _______________

Beta D=________________

b. What is the expected rate of return on each stock if the market return is equally likely to be 8% or 20%? (Round your answers to 2 decimal places.)

Return of Beta A = _________%

Return of Beta D = _________%

c. If the T-bill rate is 7%, and the market return is equally likely to be 8% or 20%, 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 = ______________%