Question: 8. Given the following two stocks A and B Security B Expected rate of return 0.12 0.14 Beta 1.2 1.8 If the expected market rate

 8. Given the following two stocks A and B Security B

8. Given the following two stocks A and B Security B Expected rate of return 0.12 0.14 Beta 1.2 1.8 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

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