Question
Consider two stocks, British American Tobacco plc and Anglo American Platinum Ltd.. British American Tobacco plc has an expected return of 19.3% and a beta
Consider two stocks, British American Tobacco plc and Anglo American Platinum Ltd.. British American Tobacco plc has an expected return of 19.3% and a beta of 1.5. Anglo American Platinum Ltd. has an expected return of 13.2% and a beta of 1.1. The expected market rate of return is 14% and the risk-free rate is 5%. Security ________ would be considered the better buy because ________. A) British American Tobacco plc; it offers an expected excess return of 0.62% B) Anglo American Platinum Ltd.; it offers an expected excess return of 0.73% C) British American Tobacco plc; it offers an expected excess return of 0.8% D) British American Tobacco plc; it offers an expected excess return of 0.79% E) Anglo American Platinum Ltd.; it offers an expected excess return of 0.6%
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