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Stock A has a beta of 1.19 and an expected rate of return of 13.42 percent. The market risk premium is 8.2 percent and the risk-free rate is 4.1...


Stock A has a beta of 1.19 and an expected rate of return of 13.42 percent. The market risk premium is 8.2
percent and the risk-free rate is 4.1 percent. Which one of the following statements related to Stock A is
correct?












Student Response

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A.

Stock A is correctly priced.





B.

Stock A is underpriced.





C.

Stock A is overpriced.





D.

The answer cannot be determined based on the information provided.






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0/10
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Finance-8099743.doc

Stock A has a beta of 1.19 and an expected rate of return of 13.42 percent. The market risk premium is 8.2 percent and the risk­free rate is 4.1 percent. Which one of the following statements...

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