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Assume that the CAPM is a good description of stock price returns. The market expected return is 7% with 12% volatility and the risk-free
Assume that the CAPM is a good description of stock price returns. The market expected return is 7% with 12% volatility and the risk-free rate is 2%. New news arrives that does not change any of these numbers but it does change the expected return of the following stocks: a. At current market prices, which stocks represent buying opportunities? b. On which stocks should you put a sell order in? Complete the table with the alphas below: (Round to one decimal place.) Expected Return Volatility Beta Green Leaf 14% 24% 1.31 NatSam 11% 42% 1.52 HanBel 11% 35% 0.88 Rebecca Automobile 7% 31% 1.39 Alpha % % % do do % Complete the table with the decisions below: (Select from the drop-down menus.) Expected Return Volatility Beta Decision Green Leaf NatSam 14% 24% 1.31 11% 42% 1.52 HanBel Rebecca Automobile 11% 35% 0.88 7% 31% 1.39 Enter your answer in each of the answer boxes. esc 7 62 # 3 800 F3 F4 54 MacBook Pro 44 DII 44 F7 F & 910 F12 55 % 6 7 8 00 Q W E R T Y U tab 9 0 A S D F G H J K caps lock shift N X C V B N M O P F12 ? G delete
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