You have been looking for stocks that are "good values" and have calculated expected returns for five stocks. Assume the risk-free rate (kRF) is 7% and the market risk premium (kM - kRF) is 2%. which security would be the best investment? (Assume you must choose just one.) Show your solutions and explain your answer. Stock Expected Return Beta A 9.01% 1.70 B 7.06% 0.00 5.04% 0.67 8.74% 0.87
You have been looking for stocks that are "good values" and have calculated expected returns for five stocks. Assume the risk-free rate (kRF) is 7% and the market risk premium (kM - kRF) is 2%. which security would be the best investment? (Assume you must choose just one.) Show your solutions and explain your answer. Stock Expected Return Beta A 9.01% 1.70 B 7.06% 0.00 5.04% 0.67 8.74% 0.87
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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pls refer to image atached
pls show formula and solution not in spreadsheet.
Transcribed Image Text:You have been looking for stocks that are "good values" and have calculated expected returns for five stocks. ASsume the risk-free
rate (kRF) is 79% and the market risk premium (kM-KRF) is 2%. Which security would be the best investment? (Assume you must
choose just one.) Show your solutions and explain your answer.
Stock
Expected Return Beta
9.01%
1.70
B
7.06%
0.00
C
5.04%
0.67
8.74%
0.87
11.50%
2.50
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