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Karen Kay, aportfolio manager at Collins Asset Management, is using the capital asset pricing model for making recommendations to her clients. Her research department has
Karen Kay, aportfolio manager at Collins Asset Management, is using the capital asset pricing model for making recommendations to her clients. Her research department has developed the information shown in the following exhibit. Calculate expected return and alpha for each stock. Identify and justify which stock would be more appropriate for an investor who wants to Add this stock to awell-diversified equity portfolio. Hold this stock as a single-stock portfolio
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