You have the following data on the securities of three firms.

If the risk$-$free rate last year was $3\%,$ and the return on the market was $11\%,$ which firm had the best performance on a risk$-$adjusted basis? Use CAPM to calculate expected returns and compare them with actual returns.

Firm B

Firm C

There is no difference in performance on a risk$-$adjusted basis

Firm A