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oblem 7. [10pts] Based on ten years of monthly data, you derive the following information for the companies listed: a) Compute the beta coefficient for

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oblem 7. [10pts] Based on ten years of monthly data, you derive the following information for the companies listed: a) Compute the beta coefficient for each stock (i.e., A, B, and C). b) Assuming a risk-free rate of 8% and an expected return for the market portfolio of 15%, compute the expected (required) return for all the stocks and plot them on the SML. c) Plot the following estimated returns for the next year on the SML and indicate which stocks are undervalues or overvalued. Stock A:20%;B:19%; and C:15%

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