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Assume that the market risk premium is 9.5% and the riskless rate is 3.2%. You observe four stocks that have the following CAPM betas and

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Assume that the market risk premium is 9.5% and the riskless rate is 3.2%. You observe four stocks that have the following CAPM betas and average returns: CAPM Beta Average return Stock A 0.70 8.95% Stock B 0.75 9.45% Stock C 1.25 12.14% Stock D 2.45 24.56% Which of these stocks are overpriced based on the CAPM? A. All of them B. Only Stock D C. Stock A and Stock D D. Stock B and Stock C

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