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Assume the following data for a stock: Beta = 0.9; risk-free rate = 5%; market rate of return = 14%; and expected rate of return
Assume the following data for a stock: Beta = 0.9; risk-free rate = 5%; market rate of return = 14%; and expected rate of return on the stock = 13%. Is the stock underpriced, overpriced, or priced correctly? Explain.
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