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Which of the following statements is true? a- if the beta of a security is 1.2 and the risk-free return is 3% and the expected
Which of the following statements is true?
a- if the beta of a security is 1.2 and the risk-free return is 3% and the expected return on the market portfolio is 10%, then the fair / required return on that security is 11.4%, following the capital asset priding model (CAPM)
b- if the anticipated return on a stock exceeds the required return, then it is a good investment.
c- all of the answers are correct
d- if by adding a security to your portfolio the risk of your portfolio will decrease and the expected return on your portfolio will increase, then that security is great to add.
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