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An investor holds a stock that has an expected return of 9% with a beta of 0.9. The market portfolio has an expected return of

An investor holds a stock that has an expected return of 9% with a beta of 0.9. The market portfolio has an expected return of 11%, and the risk-free rate is 4%. Using the Capital Asset Pricing Model (CAPM), calculate the required return for the stock. Explain if the stock is overvalued or undervalued based on the CAPM calculation.

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