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You are interested in investing in a portfolio including stocks A, B, C and D. You have talked to three different financial strategists: Dan, Paul and Mary.

Assuming that the risk-free rate is 4% and the expected return on the market is 12%. Who should you take their advice? (choose one person) (show formulas and all work)

Stock

Beta

Dan's Investment

Paul's Investment

Mary's Investment

A

1.3

2500

5000

10,000

B

1.0

2500

5000

10,000

C

0.8

2500

5000

-5000

D

-0.5

2500

-5000

-5000

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92767174

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