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 7% 4% 2.5% 25 38 16 What is the expected rate of return on each stock if the market return is equally likely to be 7% or 25%?
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 |
| 7% | 4% | 2.5% |
| 25 | 38 | 16 |
What is the expected rate of return on each stock if the market return is equally likely to be 7% or 25%?
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