You are considering investing in Smith Electronic's common stock Based on your perception of Smith's riskiness, you will require a return of 8 5 on their stock Smith's most recent beta is 1 20 The risk free rate is currently 3 25 , while the market return is currently 7 75 Based on these data, should you invest in Smith's stock A No, because Smith's expected return is less than your required return B You are indifferent because Smith's expected return is equal to your required return C Yes, because Smith's expected return is equal to your required return D Yes, because Smith's expected return exceeds your required return

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Question: You are considering investing in Smith Electronic's common stock. Based on your perception of Smith's riskiness, you will require a return of 8.5% on their

You are considering investing in Smith Electronic's common stock. Based on your perception of Smith's riskiness, you will require a return of 8.5% on their stock. Smith's most recent beta is 1.20. The risk-free rate is currently 3.25%, while the market return is currently 7.75%. Based on these data, should you invest in Smith's stock?

A	No, because Smith's expected return is less than your required return.
B	You are indifferent because Smith's expected return is equal to your required return.
C	Yes, because Smith's expected return is equal to your required return.
D	Yes, because Smith's expected return exceeds your required return.

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