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Based on the following information for Stock A and Stock B, which stock will you choose to add to a market index portfolio based CAPM?

Based on the following information for Stock A and Stock B, which stock will you choose to add to a market index portfolio based CAPM? Assume the risk-free rate is 5% and the market risk premium is 10%.

Stocks	E(r)	Standard Deviation	Beta
A	16%	20%	1.3
B	10%	25%	0.6

a) stock A

b) stock B

c) Both A and B

d) Neither A or B

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