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At present, the riskless rate of return is 5 percent and the expected rate of return on the market portfolio is 11 percent. The expected

At present, the riskless rate of return is 5 percent and the expected rate of return on the market portfolio is 11 percent. The expected return for a common stock is 20 percent and the stock's beta is 1.2. Is this particular common stock undervalued or overvalued?

undervalued

overvalued

fairly valued

cannot tell

none of the above

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