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

Beta Expected Return

Anderson, Inc. $0\mathrm{.}90,10\mathrm{.}5\%$

Delta Vanlines $1\mathrm{.}25,13\mathrm{.}0\%$

Nathan's $,1\mathrm{.}60,16\mathrm{.}0\%$

Bakeries

$Z-$man $1\mathrm{.}90,19\mathrm{.}0\%$

Electronics

Delta Vanlines

Nathan's Bakeries

Anderson, Inc.

All of the stocks

Z$-$man Electronics