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problem: You have been scouring The Wall Street Journal looking for stocks that are "good values" & have computed the expected returns for five stocks (a,b,c,d,e). Suppose the risk-free rate (kRF) is 7% and the market risk premium (kM - kRF ) is 2%. Determine which security would be the best investment? [Suppose you must select just one.]

Expected Return	Beta
a.	9.01%	1.70
b.	7.06%	0.00
c.	5.04%	-0.67
d.	8.74%	0.87
e.	11.50%	1.4

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Basic Finance, Finance

Category:- Basic Finance
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