There's a space between expected return and beta column, just letting you know so it prevents any confusion. Please show work as well, thanks.

Problem 2 You learn the following information from a financial analyst who has been following these three stocks: Expected Return Beta Stock Pear 7% Stock Banana 10% 1.2 Stock Orange 8% 0.7 You also learn that the risk-free rate is 1%, and the expected market return is 9% per year. i. Which stock has the highest risk? Why? a. Stock Pear because it has the lowest expected return; b. Stock Banana because it has the highest beta; c. Stock Orange because it has the lowest beta; d. All stocks have the same risk because the idiosyncratic risk is diversifiable. ii. If the analyst is right, which stock(s) is/are underpriced? a. Stock Pear only; b. Stock Banana only; c. Stock Orange only; d. Stock Pear and Stock Banana; e. All three stocks are underpriced; None of the stocks is underpriced. iii. Based on your analysis in (ii), which stock(s) should you buy? Which stock(s) should you sell or short sell