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10. Use the following information Ine risk-tree rate is 1%. a) Find LCD's beta using the market model (Regression). (3 pts) b) Draw the security

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10. Use the following information Ine risk-tree rate is 1%. a) Find LCD's beta using the market model (Regression). (3 pts) b) Draw the security market line. Use the average of rm. ( 3 pts) c) If a stock that has a beta of 0.8 is currently expected to earn 5%, is the stock overvalued or undervalued? What is expected to happen to the stock's price and return? ( 3 pts)

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