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Currently Stock A produces an annual return of 4%. Here 10 years Treasury Note generates Yield to Maturity of 5%. S&P 500 index generates an
Currently Stock A produces an annual return of 4%. Here 10 years Treasury Note generates Yield to Maturity of 5%. S&P 500 index generates an annual return of 7%. Beta of Stock A is 1.2. Please estimate an expected return of Stock A, using CAPM (Capital Asset Pricing Model) and then say whether or not Stock A is overpriced.
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