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Ralph has invested $100,000 in U.S. Treasury bills paying 2%. He is considering moving some of his funds from the T-bills into ABC stock. The

Ralph has invested $100,000 in U.S. Treasury bills paying 2%. He is considering moving some of his funds from the T-bills into ABC stock. The stock has a beta of 0.8. Ralph expects a return of 10% from the stock, whereas the market rate of return is 11%. Should he buy the stock or leave his funds in the T-bill? Explain.

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