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You are given data on the following 2 companies: Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta

You are given data on the following 2 companies: Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta 1 3 The market risk premium is 6% and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies? Which one?

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