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Potvin Potvin
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7 years ago
You have been scouring The Wall Street Journal looking for stocks to add to your (large) portfolio. The table presents data that you have collected on four stocks that look promising. You have calculated the return that you anticipate earning from each stock along with its beta. Which of the four securities should you add to your portfolio? (Assume you must choose just one.) Assume the risk-free rate is 7.00% and the market risk premium is 2.00%.

Stock   Anticipated Return   Beta
A   9.01%   1.70
B   7.06%   0.00
C   8.74%   0.87
D   11.50%   2.50

A) Stock A
B) Stock B
C) Stock C
D) Stock D
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 1st
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BlimpBlimp
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7 years ago
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Pol. Sci. Major
Minoring in Business
Columbia University Sophomore

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7 years ago
I'm impressed by the service offered here
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