Answer to Question #317413 in Marketing for Maham

Question

You are given the following data:

Name of the Company, Expected Beta, Expected Return in percent

A 0.95 12

B 0.80 15

C 0.65 13.50

D 0.64 10

E 0.90 12.5

F 0.60 16.5

G 1.25 18

Expected return of the Market - 14%; Risk free rate of return - 5%

With the help of above given information find the stocks which you would recommend

to buy or sell? Which technique would you employ to calculate the same? List down the

other applications if any?

Answer 1

The stock recommended for purchase is F while the stock recommended to sell is D.

The technique that I would employ is comparing the closing and starting price of the stock with consideration to their overall trends.