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Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 11% volatility and the risk-free rate

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 11% 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?image text in transcribedimage text in transcribed

Green Leaf NatSam Han Bel Rebecca Automobile Expected Return 10% 10% 11% 6% Volatility 21% 47% 30% 31% Beta 1.44 1.54 0.72 1.03 Beta Alpha % 1.44 Complete the table with the alphas below: (Round to one decimal place.) Expected Return Volatility Green Leaf 10% 21% NatSam 10% 47% HanBel 11% 30% Rebecca Automobile 6% 31% 1.54 % 0.72 % 1.03 % Complete the table with the decisions below: (Select from the drop-down menus.) Expected Return Volatility Green Leaf 10% 21% Beta Decision 1.44 NatSam 10% 47% 1.54 HanBel 11% 30% 0.72 Rebecca Automobile 6% 31% 1.03

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