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7 pts Question 22 Suppose the rate of return on a short-term government bill is about 3.5%, and the expected rate of return required by

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7 pts Question 22 Suppose the rate of return on a short-term government bill is about 3.5%, and the expected rate of return required by the market for a portfolio with a beta of 1 is 15%. William is considering to buy some TSM Inc stocks at $120. The beta of TSM Inc. is 1.1. The stock of is expected to pay $2 dividend next year and William expects it to sell them for $140. 1) Please estimate the expected rate of return of TSM Inc. by using CAPM. 2) Please determined the stock is overpriced or underpriced. Edit View Insert Format Tools Table 12pt Paragraph BIU A Tvoo Do

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