USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.

		Current	Expected	Expected
Stock	Beta	Price	Price	Dividend
X	1.25	$20	$23	$1.25
Y	1.50	$27	$29	$0.25
Z	0.90	$35	$38	$1.00

Refer to Exhibit 7.2. What is your investment strategy concerning the three stocks?

a. buy X, Y, and Z

b. sell X, Y, and Z

c. buy X and Y; sell Z

d. buy X and Z; sell Y

e. sell X and Z; buy Y