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The following table contains information on the expected return, market beta, financial intermediary beta, market value of equity, and book value of equity for 6
The following table contains information on the expected return, market beta, financial intermediary beta, market value of equity, and book value of equity for 6 stocks: NFLX 12.996 DIS 12.7% 1.6 PFE 4.9% PSX XEL SQ 16.3% 17.1% 14.1% 1.2 0.2 2.2 2.0 0.4 -0.2 0.2 -0.2 0.8 1.0 0.0 E[0) Market Beta Financial Intermediary Beta Market Value of Equity Book Value of Equity 132.4 255.3 206.4 83.0 31.6 28.3 5.2 58.8 43.4 26.9 12.2 1.1 If the CAPM holds (that is, the assumptions of the CAPM are satisfied), which of the six stocks SHOULD have the highest expected return? OPSX OXEL O SQ O DIS OPFE NFLX
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