As an investor with a well-diversified portfolio, which stock(s) should MSI buy? Why? Security market line DVA

As an investor with a well-diversified portfolio, which stock(s) should MSI buy? Why?

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Security market line DVA AMGN LH MCK HUM MDT PFE ANTM UNH CNC Risk-free rate (3% per case info) 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Market required return (6%) 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% Market beta 1.39 1.16 1.21 1.30 0.92 0.76 0.72 0.96 0.83 0.43 Stock required return (4b) 7.2% 6.5% 6.6% 6.9% 5.7% 5.3% 5.1% 5.9% 5.5% 4.3% Comparison of Expected Return to Required Return DVA 1/1/2020 Forecast Adj Closing Prices 1/1/2019 Historical Adj Closing Prices Stock expected return Stock required return Difference Over or under valued? Over Over Over AMGN LH MCK HUM 60.72 195.08 148.12 148.12 135.15 325.99 56.13 184.09 139.35 127.45 307.70 8.2% 6.0% 6.3% 6.0% 5.9% 7.2% 6.5% 6.6% 6.9% 5.7% 1.0% -0.5% -0.3% -0.9% 0.2% Under MDT PFE ANTM UNH CNC Valued Valued Valued Valued Under Valued Valued Valued Valued Under Valued Over Valued 92.27 87.43 41.71 301.34 5.5% 4.9% 5.5% 5.3% 5.1% 5.9% 0.3% -0.2% -0.4% Over Over Valued | Valued 43.77 317.89 281.58 68.46 267.99 65.29 5.1% 4.9% 5.5% 4.3% -0.4% 0.6% Under Valued Security market line DVA AMGN LH MCK HUM MDT PFE ANTM UNH CNC Risk-free rate (3% per case info) 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Market required return (6%) 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% Market beta 1.39 1.16 1.21 1.30 0.92 0.76 0.72 0.96 0.83 0.43 Stock required return (4b) 7.2% 6.5% 6.6% 6.9% 5.7% 5.3% 5.1% 5.9% 5.5% 4.3% Comparison of Expected Return to Required Return DVA 1/1/2020 Forecast Adj Closing Prices 1/1/2019 Historical Adj Closing Prices Stock expected return Stock required return Difference Over or under valued? Over Over Over AMGN LH MCK HUM 60.72 195.08 148.12 148.12 135.15 325.99 56.13 184.09 139.35 127.45 307.70 8.2% 6.0% 6.3% 6.0% 5.9% 7.2% 6.5% 6.6% 6.9% 5.7% 1.0% -0.5% -0.3% -0.9% 0.2% Under MDT PFE ANTM UNH CNC Valued Valued Valued Valued Under Valued Valued Valued Valued Under Valued Over Valued 92.27 87.43 41.71 301.34 5.5% 4.9% 5.5% 5.3% 5.1% 5.9% 0.3% -0.2% -0.4% Over Over Valued | Valued 43.77 317.89 281.58 68.46 267.99 65.29 5.1% 4.9% 5.5% 4.3% -0.4% 0.6% Under Valued

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