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In a recent closely contested lawsuit, Apex sued Bpex for patent infringement

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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 r_A = 3.9%. The rate of return on Bpex was only r_B = 3.5%. The market today responded to very encouraging news about the unemployment rate, and r_M = 3.6%. The historical relationship between returns on these stocks and the market portfolio has been estimated from index model regressions as:

Apex: r_A = 0.3% + 1.1r_M

Bpex: r_B = −0.1% + 0.7r_M

a) What is the predicted returns for Apex & Bpex? (Do not round intermediate calculations. Round your answers to 1 decimal place.)

b) Which company do you think won the lawsuit?