Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months $($labeled "Expected Return"$).$ You have estimated that the risk$-$free rate is $5\%$ and the return to the market will be $12\%.$ Assuming that CAPM is correct, which stock should you purchase?

Firm BetaExpec Retur

Anderson, $0\mathrm{.}7510\mathrm{.}5\%$ Inc.

Delta $,1\mathrm{.}2413\mathrm{.}0\%$

Vanlines

Nathan's $1\mathrm{.}6016\mathrm{.}0\%$

Bakeries

Z$-$man $2\mathrm{.}1519\mathrm{.}0\%$

Electronics

Delta Vanlines

All of the stocks

Anderson, Inc.

Nathan's Bakeries

Z$-$man Electronics