Answer the questions below using the following information on stocks A,B,and C. 
Assume the risk-free rate of return is 3% and the expected market return is 12%
a.Calculate the required return for stocks A,B,and C.
b.Assuming an investor with a well-diversified portfolio,which stock would the investor want to add to his portfolio?
c.Assuming an investor who will invest all of his money into one security,which stock will the investor choose?
Definitions:
Business Combinations
Transactions in which one entity gains control over one or more other businesses, including mergers, purchases of net assets, and consolidations.
AASB 3
Refers to the Australian Accounting Standards Board standard that outlines the requirements for the accounting of business combinations, including the recognition and measurement of assets, liabilities, non-controlling interest, and goodwill.
Joint Arrangements
Agreements between two or more parties that establish joint control over economic activities.
Tax Purposes
Refers to reasons or activities related to the calculation and payment of taxes.
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