You've collected the following information for two stocks Beta Dividend yield Growth rate Stock 1 0.5 8% 4% Stock 2 1.6 1% 8% The risk-free rate is 2% and the expected return on the market portfolio is 9%. Part 1 Without doing any calculations, which stock should you buy? O Stock 1, because it has a lower beta O Stock 1, because it has a higher dividend yield O Neither stock Stock 2, because it has a higher growth rate Not enough information provided Both stocks O Stock 2, because it has a higher beta Save Part 2 What is the required return for stock 1 based on the CAPM? 3+ decimals Submit Part 3 What is the required return for stock 2 based on the CAPM? 3+ decimals Submit Attempt 1/1 Attempt 1/3 for 10 pts. Attempt 1/3 for 10 pts. Submit Part 4 Which stock should you buy? Both stocks O Stock 1, because its required return is greater than stock 2's Not enough information provided ONeither stock Stock 2, because its required return is greater than stock 1's Save Attempt 1/1 Part 5 Attempt 1/3 for 10 pts. What is the expected return for stock 1 based on the constant growth model? 3+ decimals Submit Part 6 Attempt 1/3 for 10 pts What is the expected return for stock 2 based on the constant growth model? 3+ decimals Submit Atempt 1/1 Part 7 Which stock should you buy? O Stock 1, because its expected return is is greater than stock Zs Stock 1, because its expected return is greater than its required retum Not enough information provided O Stock 2, because its expected return is greater than stock 1's O Stock 2, because its expected return is greater than its required retum ONeither stock Both stocks Save