1)) If the required return from an asset is 11% and the asset has a 60% probability of yielding a 16% return and a 40% probability of earning a 5% return, you should:

1)Buy the asset because the expected return of 16% exceeds the required return.

2)Not acquire the asset since the expected return of 5% does not exceed the required return.

3)Purchase the asset since the expected return exceeds the required return.

4)Forget the investment opportunity since the expected return of 12% is too low

5)Buy the asset because the expected return of 21% exceeds the required return.

6)None of the above.

7)Not enough information