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You are evaluating two possible stock investments , Leverage Co. and Value Corp. Leverage Co. has an expected return of 10 % and a beta

You are evaluating two possible stock investments , Leverage Co. and Value Corp. Leverage Co. has an expected return of 10 % and a beta of 1.4 . Value Corp , has an expected return of % and a beta of 0.9. Based only on this data , which stock should you buy and why?


If you expect a significant market would your decision be altered ? Explain .

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