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11) The expected market rate of return is 14%, and the risk free rate is 4%. Stock A has a beta of 1.2. If the

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11) The expected market rate of return is 14%, and the risk free rate is 4%. Stock A has a beta of 1.2. If the stock is currently priced to yield a return of 15% (expected return), then: a) The stock is overpriced b) The stock is underpriced c) The stock lies on the SML d) The stock lies above the SML e) The stock is fairly priced 4) The stock of Keif Corp has an expected return of 15% and Fireball Corp has an expected return of 20%. If you put 40% of your money in Keif and 60% in Fireball, what is your expected return for your portfolio? a) 15.9% b) 17.2% c) 18.0%. d) 19.1% e) 52.6%

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