Select the best answer. Stock C has a required rate of return (rs) of 14%,...
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Select the best answer. Stock C has a required rate of return (rs) of 14%, an expected return (^r) of 15% and a beta of 1.5. Stock D has a required rate of return (rs) of expected return (^r) of 11%.and a beta of .95 You plan to add either Stock C 12%, an or Stock D to an existing portfolio. a. You would select Stock C because it has the highest expected return (^r), therefore the highest potential reward. b. You select Stock C because its expected return (^r) is higher than its required return (rs) therefore has the most attractive risk/reward profile. c.You would select Stock D because it has the lowest expected return (^r), therefore has the least potential loss. d. You would select Stock D because its expected return (^r) is lower than its required return (rs), therefore has the most attractive risk/reward ratio. e.You would select neither stock because each has a beta that is equal or less than its expected return (^r)
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