43. Given the following two stocks A and B Security Expected rate of return Beta 1.2...

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43. Given the following two stocks A and B Security Expected rate of return Beta 1.2 1.8 A B 0.12 0.14 If the expected market rate of return is 0.09 and the risk-free rate is 0.05, which security would be considered the better buy and why? A. A because it offers an expected excess return of 1.2%. B. B because it offers an expected excess return of 1.8%. C. A because it offers an expected excess return of 2.2%. D. B because it offers an expected return of 14%. E. B because it has a higher beta. 43. Given the following two stocks A and B Security Expected rate of return Beta 1.2 1.8 A B 0.12 0.14 If the expected market rate of return is 0.09 and the risk-free rate is 0.05, which security would be considered the better buy and why? A. A because it offers an expected excess return of 1.2%. B. B because it offers an expected excess return of 1.8%. C. A because it offers an expected excess return of 2.2%. D. B because it offers an expected return of 14%. E. B because it has a higher beta.

Answer rating: 100% (QA)

Solution The correct option is C A bec... View the full answer