Consider the following list of projects:
You are given a budget of only $1,800,000 to invest in projects.Which projects will you select,in what order will you select them,and why?
Definitions:
Beta
A measure of a stock's volatility in relation to the overall market; a beta above 1 means the stock is more volatile than the market, while a beta below 1 means it is less volatile.
CAPM
The Capital Asset Pricing Model, a theory used to determine the expected return on investment based on its inherent risk and the cost of capital.
Expected Return
The anticipated profit or loss from an investment based on its potential risks and rewards.
SML
The Security Market Line (SML) represents the relationship between the expected return of a market security and its risk, measured by beta, within the Capital Asset Pricing Model (CAPM).
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