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Q 1 9 . Reward - to - Risk Ratios. Stock Y has a beta of 1 . 2 5 and an expected return of

Q19.Reward-to-Risk Ratios. Stock Y has a beta of 1.25 and an expected return of 12.6 percent. Stock Z has a
beta of .85 and an expected return of 10.3 percent. If the risk-free rate is 4.1 percent and the market risk
premium is 7 percent, are these stocks correctly priced?
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