Question
Q5. Suppose you observe the following situation. If the risk-free rate is 7 percent, are these securities correctly priced based on the CAPM? Security Beta
Q5. Suppose you observe the following situation. If the risk-free rate is 7 percent, are these securities correctly priced based on the CAPM?
| Security | Beta | E(return) |
| Cooley | 1.8 | 22.00% |
| Moyer | 1.6 | 20.44 |
A. Yes B. No C. Uncertain
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Financial Economics
Authors: Zvi Bodie, Robert C Merton, David Cleeton
2nd Edition
0558785751, 9780558785758
