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and Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of .5 and an expected
and Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of .5 and an expected return of 7.2 percent. If the risk-free rate is 5 percent and the market risk premium is 6 percent, the reward- to-risk ratios for stocks Y and Z are percent, respectively. Since the SML reward- to-risk is percent, Stock YV (Click to select) hd Stock Z is (Click to select) ~ ). (Do not round intermediate calculations. Er undervalued percent rounded to 2 decimal places, e.g., 32.16.) overvalued
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