In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on Apex was ra = 3.7%. The rate of return on Bpex was only B = 3.3%. The market today responded to very encouraging news about the unemployment rate, and = 3.4%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: A 0.38 + 1.5M Bpex: rg-0.1% + 0.5M a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Apex Bpex Predicted Returns % % b. Which company do you think won the lawsuit? O Apex O Bpex

In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate of return on Apex was ra = 3.7%. The rate of return on Bpex was only B = 3.3%. The market today responded to very encouraging news about the unemployment rate, and = 3.4%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as: Apex: A 0.38 + 1.5M Bpex: rg-0.1% + 0.5M a. What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Apex Bpex Predicted Returns % % b. Which company do you think won the lawsuit? O Apex O Bpex

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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