III Homework: Assignment 7 Question 6, P8-31 (similar to) > HW Score: 0%, 0 of 8 points O Points: 0 of 1 Save Reward-to-risk ratio. The Royal Seattle Investment Club has $100,000 to invest in the equity market. Frasier advocates investing the funds in KSEA Radio with a beta of 1.2 and an expected return of 17.7%. Niles advocates investing the funds in Northwest Medical with a beta of 0.9 and an expected return of 15.6%. The club is split 50/50 on the two stocks. You are the deciding vote, and you cannot pick a split of $50,000 for each stock. Before you vote, you look up the current risk-free rate (the one-year U.S. Treasury bill with a yield of 3.25%). Which stock do you select? (Select the best response.) O A. The choice is KSEA Radio based on the higher reward-to-risk ratio 15.72%. B. The choice is KSEA Radio based on the higher reward-to-risk ratio of 13.72%. O C. The choice is Northwest Medical based on the higher reward-to-risk ratio 12.04% OD. The choice is Northwest Medical based on the higher reward-to-risk ratio of 13.72%
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