Answer the questions below using the following information on stocks A , B , and C .
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Question:
Answer the questions below using the following information on stocks A B and C
A B C
Expected Return
Standard Deviation
Beta
Assume the riskfree rate of return is and the expected market return is
a Calculate the required return for stocks A B and C
b Assuming an investor with a welldiversified portfolio, which stock would the investor want to add to his portfolio?
c Assuming an investor who will invest all of his money into one security, which stock will the investor choose?
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