If the required return from an asset is 11% and the asset has a 60% probability of yielding a 16% return and a 40% probability of earning a 5% return, you should:
1) Buy the asset because the expected return of 16% exceeds the required return.
2) Not acquire the asset since the expected return of 5% does not exceed the required return.
3) Purchase the asset since the expected return exceeds the required return.
4) Forget the investment opportunity since the expected return of 12% is too low
5) Buy the asset because the expected return of 21% exceeds the required return.
6) None of the above.
7) Not enough information