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Determine which of the stock you are ready to buy and sell? Problem 2 Assume we expect 6% on a risk free asset and return

Determine which of the stock you are ready to buy and sell?
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Problem 2 Assume we expect 6% on a risk free asset and return on proxy market portfolio of 12%. Several stocks are considered: A beta = 0.9 B beta = 1.3 C beta = -0,1 Your broker provided you with the following Stock Current price (Pt) Expected price (Pt+1) Expected dividend (Dt+1) A 25 27 1.50 B 35 38 1.00 C 54 57 0.00 Required: a. Required rate of return for every stock b. What does negative beta mean? C. Determine which of the stock you are ready to buy and sell

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