Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. select the best answer. stock c has a required rat

Select the best answer. Stock C has a required rate of return (rs) of 14%,...

60.1K

Verified Solution

Question

Finance

image

Select the best answer. Stock C has a required rate of return (rs) of 14%, an expected return (^r) of 15% and a beta of 1.5. Stock D has a required rate of return (rs) of expected return (^r) of 11%.and a beta of .95 You plan to add either Stock C 12%, an or Stock D to an existing portfolio. a. You would select Stock C because it has the highest expected return (^r), therefore the highest potential reward. b. You select Stock C because its expected return (^r) is higher than its required return (rs) therefore has the most attractive risk/reward profile. c.You would select Stock D because it has the lowest expected return (^r), therefore has the least potential loss. d. You would select Stock D because its expected return (^r) is lower than its required return (rs), therefore has the most attractive risk/reward ratio. e.You would select neither stock because each has a beta that is equal or less than its expected return (^r)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Explain how during the past Presidential election how so many statisticians got the projections of the...

Biology
1.2K views

describe a real life application of the plaque assay

Biology
1.2K views

Of the following, which can we examine to see past climate patterns? A. magma B....

Physics
1.2K views

It is said that any charge given to a conductor comes to its surface Should...

Physics
1.2K views

6 When should you apply the conservation of momentum equation

Basic Math
1.2K views

Rewrite sin 73.3 in terms of its cofunction.sin 73.3 =(Type an exact answer. Simplify your...

Basic Math
1.2K views

The half-life of radium-223 is approximately 11.43 days.How much of an 8 gram sample of...

Statistics
1.2K views

A 95 confidence is given by 15 20 The interval is based on a sample...

Algebra
1.2K views

1 Determine the value of the unknown in the given matrix equalities 1 ii 5...

Accounting
1.2K views

please organize all the answers so its easy to read and understand ...

Accounting
1.2K views

Question 3 of 15. A sole proprietorship that began business on May 1, 2020, incurred...

Accounting
1.2K views

Case 2: Modern Office Machines. Modern Office Machines is a manufacturer of small office equipment....