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Reward-to-Risk Ratios. Stock Y has a beta of 1.50 and an expected return of 16 percent. Stock Z has a beta of .70 and an

Reward-to-Risk Ratios. Stock Y has a beta of 1.50 and an expected return of 16 percent. Stock Z has a beta of .70 and an expected return of 11.5 percent. If the risk-free rate is 5.5 percent and the market risk premium is 8 percent, are these stocks correctly priced?

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