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22) The preferred stock of XFY Sdn Bhd has a beta of 1.34 and an actual expected return of 11.25 percent. The risk-free rate of

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22) The preferred stock of XFY Sdn Bhd has a beta of 1.34 and an actual expected return of 11.25 percent. The risk-free rate of return is 2.1 percent and the market rate of return is 11.78 percent. Which one of the following statements is true given this information? A) The stock is currently underpriced. B) To be correctly priced according to CAPM, the stock should have an expected return of 13.56 percent. C) The stock has less systematic risk than the overall market. D) The actual expected stock return indicates the stock is currently overpriced

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