Question: Based on current dividend yields and expected growth rates, the estimated rates of return on stocks A and B (from your analyst) are 13% and

Based on current dividend yields and expected growth rates, the estimated rates of return on stocks A and B (from your analyst) are 13% and 16%, respectively. The beta of stock A is 0.8, while that of stock B is 1.5. The T-bill rate is currently 0.50%, while the expected rate of return on the S&P/TSX index is 11%.

a) Would you choose to add either of these stocks to your holdings? Why or why not?

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