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Currently, the risk-free rate is 3% and the expected return on the market portfolio is 10% percent. Market analysts' return expectations for four stocks are
Currently, the risk-free rate is 3% and the expected return on the market portfolio is 10% percent. Market analysts' return expectations for four stocks are listed here, together with each stock's expected beta. STOCK EXPECTED RETURN EXPECTED BETA Company A 11.0% 1.2 Company B 10.0% 0.9 Company C 12.0% 1.4 Company D 14.0% 1.6 If the analysts' expectations are correct, which stocks (if any) are overvalued
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