An investor is analyzing four stocks as potential investments to add to their portfolio. The investor has analyzed each stock, and has strong beliefs about the return that each could offer, calling those "anticipated returns". Given the information in the table below, and assuming the anticipated returns are accurate, which stock seems like the best investment?

 The risk free rate is 5% and the expected return of the market is 8%.

	Stock	Anticipated return	Beta
	A	10%	1.6
	B	10%	1.7
	C	7%	0.5
	D	6%	0.3

Answer rating: 100% (QA)

To determine the best investment we need to calculate the expected return of each stock using the Ca... View the full answer