Given the following two securities, if the expected market rate of return is 9% and the risk-free rate is 5%, which security would be considered the better buy and why?

Security

Expected Return

Beta

A

10%

1.1

B

12%

1.5

B because it offers an expected excess return of 1.5%.

A because it offers an expected excess return of 1.1%.

A because it offers an expected excess return of 0.6%.

B because it offers an expected return of 12%.