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If the risk - free rate of return is 3 . 3 percent and the market risk premium is 7 . 8 percent. Stock A
If the riskfree rate of return is percent and the market risk premium is percent.
Stock A is Select
Stock B i
Stock
underpriced
is
overpriced correctly priced
Hint: Compare Expected Return to CAPM Required Return
Stock Beta
Expected Return
A
B
C
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