Question
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: Current
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:
|
|
| Current | Expected | Expected |
| Share | Beta | Price | Price | Dividend |
| X | 3.0 | $15 | $18 | $0.5 |
| Y | 2.0 | $16 | $19 | $0.4 |
| Z | 1.0 | $17 | $20 | $0.3 |
What is the most profitable investment strategy concerning these three shares?
Group of answer choices
Sell X, and buy Y and Z
Sell X and Y, and buy Z
Buy X, Y and Z
Sell X, Y and Z
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
