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Based upon analysis, you think the return of stock A will be higher, indicated as A * . In this case, you would be claiming

Based upon analysis, you think the return of stock A will be higher, indicated as A*. In this case, you would be claiming that the stock is
A graph shows Expected Return on the y-axis and Beta on the x-axis. A line from the Risk-Free Asset point on the y-axis passes through point M (where Beta =1, Expected Return = R subscript M) and also passes through point A (where Beta =1.2, Expected Return = R subscript A) and is denoted as the Security Market Line. A green point A*, outlined in red, is located not on the line and directly above point A.
a. similarly priced.
b. overpriced.
c. underpriced.
d. risk adjusted.

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