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1. Using the CAPM, which of the following choices is the best investment? Why? Assume the expected return on the market index is 10% and

1. Using the CAPM, which of the following choices is the best investment? Why? Assume the expected return on the market index is 10% and the risk free rate is 2%.

Asset

Expected Return

Beta

A

12%

1.3

B

14%

1.6

C

11%

1.1

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