Question: Consider the following information describes the expected return and risk relationship for three stocks: Lasco Foods Grace Manufacturing Wysinco Ltd. Market Risk Premium Risk

Consider the following information describes the expected return and risk relationship for

Consider the following information describes the expected return and risk relationship for three stocks: Lasco Foods Grace Manufacturing Wysinco Ltd. Market Risk Premium Risk Free Rate Expected Return 12.95% 16% 11% 8% 10% Standard Deviation 22% 12% 9% Beta 1.4 0.95 0.75 a) Using CAPM, calculate the Expected Return for each Stock. (15 Marks) b) As an investment advisor, which stock will you recommend for investment and why?

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