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Determine whether each of the following companies is over- or underpriced. Company Forecasted return Standard Deviation Beta Alls Well 12% 8% 1.5 Ends Well 11%
Determine whether each of the following companies is over- or underpriced.
| Company | Forecasted return | Standard Deviation | Beta |
| Alls Well | 12% | 8% | 1.5 |
| Ends Well | 11% | 10% | 1.0 |
| RF = 4%; RM = 10% | |||
Determine the required return for each company using the CAPM:
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