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If a security's expected return is below the Security Market Line, the security is underpriced: offering too high a rate of return for its level
If a security's expected return is below the Security Market Line, the security is underpriced: offering too high a rate of return for its level of risk overpriced: offering too low a rate of return for its level of risk underpriced: offering too low a rate of return for its level of risk overpriced: offering too high a rate of return for its level of risk underpriced: the firm-specific return is larger than expected
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