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Suppose the expected return of stock i is given by E(Ri)=Rf+i[E(RM)Rf]. Stocks A, B, and C have betas of 1.5, 0.5, and 1.2, respectively (see

Suppose the expected return of stock i is given by E(Ri)=Rf+i[E(RM)Rf]. Stocks A, B, and C have betas of 1.5, 0.5, and 1.2, respectively (see the table below). The values for Rfand E(RM) are 3% and 15% per year.

i
Stock A 1.5
Stock B 0.5
Stock C 1.2

Based on the above information, which stock is expected to earn a return of 9%?

Group of answer choices

1) Stock A and B

2) Stock A

3) Stock B

4) Stock C

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