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Question 7 (5 points) You are given data on the following 2 companies: Company Company A Forecasted return 7% Standard deviation of returns 8% Beta

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Question 7 (5 points) You are given data on the following 2 companies: Company Company A Forecasted return 7% Standard deviation of returns 8% Beta Company B 11% 23% 3 The market risk premium is 6% and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies? Which one? OI will not invest in either companies Company B Company A OI will invest in both companies

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