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Greg Noronha has been told the expected return on Merchants Bank is 8.80%, He knows the risk-free rate is 1.07%, the market risk premium is
Greg Noronha has been told the expected return on Merchants Bank is 8.80%, He knows the risk-free rate is 1.07%, the market risk premium is 6.75%, and Merchants' beta is 1.15. Based on the Capital Asset Pricing Model, Merchants Bank is: a. fairly valued b. under valued c. over valued
a. fairly valued
b. under valued
c. over valued
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