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A stocks = 1.6. We observe rRF = 4% and E(rM) = 12%. At this moment in the stock market, the actual rate of return

A stocks = 1.6. We observe rRF = 4% and E(rM) = 12%. At this moment in the stock market, the actual rate of return for the stock is 13%. Is the stock overvalued or undervalued? Explain.

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