Question 10 (2 points)

You estimate the expected return on a stock to be 10%. The required rate of return on this stock is 12%. The stock has a standard deviation of 25% and a beta of 1.2. Which of the following is correct.

Question 10 options:

	This is a good investment since it is required to return 12% for investors
	This is a bad investment since the expected return is less than the required return
	The stock is a bad investment because it has a beta greater than one.