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12) The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of 8 to
12) The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of 8 to offer a rate of return of 12%, then you should A) sell short stock X because it is underpriced 20%. + 0,8 X (11.-4 = B) buy stock X because it is overpriced C) sell short stock X because it is overpriced Hair 9.6:1
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley Eakins
6th International Edition
0321552113, 9780321552112
