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You expect the risk-free rate to be 4% and the market return to be 11%. You also have the following information about three stocks: Share
You expect the risk-free rate to be 4% and the market return to be 11%. You also have the following information about three stocks: Share x Y Z Beta 1.4 1.8 2.2 Current Price $17 $18 $21 Expected Price $18 $20 $23 Expected Dividend $0.5 $0.3 $0.0 What is the most profitable investment strategy concerning the three shares? Buy X, Y and Z Sell X, Y and Z Buy Y and Z, and sell X Sell X and Y, and buy Z
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