Asset Expected Return Beta Stock A 9% 0.9 Stock B 11% 1.4 Risk-Free As
Asset Expected Return Beta
Stock A 9% 0.9
Stock B 11% 1.4
Risk-Free Asset 5%
Consider the assets outlined in the table above. Which asset offers the best risk-return trade-off?
A) Stock A
B) Stock B
C) The risk-free asset
D) Either Stock A or Stock B as both have the same risk-return trade-off
ANSWER
A
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