The risk-free rate is 2%. The expected rate of return on the market is 12%. Beta and the expected rate of return for four shares are as follows.: ABC .8, 10%; DEF 1, 12%; GHI 1.2, 13%, and JKL 2, 22%. Which of these shares should not be purchased?
A) GHI.
B) JKL.
C) DEF.
D) ABC.
Correct Answer:
Verified
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