1. Kirtland Signature Inc. has the expected return of 20 percent. The stock has a beta of 1.4. The risk-free rate is 7% and the market return is 10%. Should you buy this stock?

   • No because the expected return on the stock is above the SML.
   • No because the expected return on the stock is below the SML.
   • Yes because the expected return on the stock is above the SML.
   • Yes because the expected return on the stock is below the SML.