You have been scouring The Wall Street Journal looking for stocks that are "good values" and have calculated the expected returns for five stocks. Assume the risk-free rate (r_RF) is 7 percent and the market risk premium (r_M-r_RF) is 2 percent. Which security would be the best investment? (Assume you must choose just one.)

Expected Return Beta

Question 10 options:

	9.01% 1.70
	7.06% 0.00
	5.04% -0.67
	8.74% 0.87
	11.50% 2.50