Question 6 (6 points) You have been provided the followin

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Question 6 (6 points)

You have been provided the following data on the securities of three firms and the market.

Security	E[r_i] Estimated From Security Prices	s_i	r_im	b
Stock A	0.15	0.06	1.0	1.5
Stock B	0.15	0.18	0.5	2.25
Stock C	0.10	0.02	1.0	0.5
Market Portfolio	0.10	0.04	1.0	1.0
Treasury-Bills	0.05	0.00	0.0	0.0

If CAPM describes how securities are priced in equilibrium, which of the three stocks would you invest in? Why?

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