An analyst has provided you with the following information about the common shares of two companies Atlantic Ltd. and Barrick Ltd.

Common Shares Atlantic Ltd Barrick Ltd Required rate of return 9% 10% Risk free rate of return 2% 2% Standard deviation of return % 11% Market risk premium 7.5% 7.5% Beta 0.8 1.35

a) Calculate the expected return for each company using the capital asset pricing model. (Use 4 decimal places) (6 marks)

b) Using the information about the companies provided above, along with your calculation in part a) Indicate whether a well-diversified investor would prefer to invest in the shares of Atlantic Ltd. or the shares of Barrick Ltd. Explain why. (4 marks)