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Assume CAPM holds and use the following information: Expected Return of Market Standard Deviation Market 14% 15% Stock A 17% 30% Risk-free rate=5%, COV(M,A)=6% Is
Assume CAPM holds and use the following information: Expected Return of Market Standard Deviation Market 14% 15% Stock A 17% 30% Risk-free rate=5%, COV(M,A)=6% Is stock A underpriced or overpriced? (Total 10 points)
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