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(4 marks) Your opinion is that Tesco has an expected rate of return of 0.13. It has a beta of 1.3. The risk-free rate is
(4 marks) Your opinion is that Tesco has an expected rate of return of 0.13. It has a beta of 1.3. The risk-free rate is 0.04 and the market expected rate of return is 0.115. According to the Capital Asset Pricing Model, this security is O overpriced. O fairly priced. O underpriced by 0.595%. O cannot be determined from data provided. O underpriced by 0.75%
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