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You have been scouring the newspapers looking for stocks that are good values and have calculated expected returns for five stocks. Assume the risk-free rate
You have been scouring the newspapers looking for stocks that are "good values" and have calculated expected returns for five stocks. Assume the risk-free rate is 7 percent and the market risk premium (RM - rf) is 2 percent. Which security would be the best investment? (Assume you must choose just one.) Expected Return Beta A. 9.01% 1.70 B. 7.06% 0.00 C. 5.04% -0.67 D. 8.74% 0.87 E. 11.50% 2.50
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