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The Risk Free Rate Is 3

question 78

Multiple Choice

The risk free rate is 3%. The expected rate of return on the market is 10%. Betas and the expected rates of return for four stocks are as follows.: BWI 0.9 , 10%; ORH 1.0, 10%; ORL 1.4 , 12.6%, and DEL 1.5, 18%. Based on a comparison of each stock's expected return versus its required return, which of these stocks should not be purchased?

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