Buy the asset because the expected return

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Reference no: EM131508766

If the required return from an asset is 11% and the asset has a 60% probability of yielding a 16% return and a 40% probability of earning a 5% return, you should:

1) Buy the asset because the expected return of 16% exceeds the required return.

2) Not acquire the asset since the expected return of 5% does not exceed the required return.

3) Purchase the asset since the expected return exceeds the required return.

4) Forget the investment opportunity since the expected return of 12% is too low

5) Buy the asset because the expected return of 21% exceeds the required return.

6) None of the above.

7) Not enough information

Reference no: EM131508766

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