Your financial plan tells you that you desire investments


Your financial plan tells you that you desire investments that have the potential to return 7%. Suppose the risk-free return is 3% and the market portfolio has an expected return of 7% and a standard deviation of 9.6%. Company A stock has a beta of 0.5. Show all work for the following for full credit.

a) What is its expected return of company A?

b) What is your investment decision regarding company A?

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Financial Management: Your financial plan tells you that you desire investments
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