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8. The SML is plotted in the diagram below E(R) in % 10 .A 5 =1.0 Which of the following statements is true based on

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8. The SML is plotted in the diagram below E(R) in % 10 .A 5 =1.0 Which of the following statements is true based on the SML shown above? ( 6 points) a. The expected market risk premium (the expected market return in excess of the risk free rate) is 10% and A is under-priced. The expected mnarket return is 10% and A is over-priced. The expected market return is 5% and A is over-priced. d. The expected market risk premium (the expected market return in excess of the risk free rate) is 5% and A is under-priced

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