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Stock A . beta = 1 . 2 Expected retiurn = 1 5 % . Stock B beta = 1 . 0 Expected return =

Stock A.beta =1.2 Expected retiurn =15%.Stock B beta =1.0 Expected return =12%cjStocjkp. ReturnStoStock B 1.012%
Stock C 0.7 Ecxpected return =8% Stock D1.5 Expected return =18%From the above details, please answer the followings:a) What is systematic risk? How is it measured?Classify these securities according to their systematic risk.b) Find the required rate of return for each of the securities as per CAPM. Assum return on T-Bill and Nifty for the period are 6% and 12% respectively.c) Which of these securities are mispriced as per CAPM?d) Calculate the abnormal returns for each of the securities and develop your investment strategies based upon it.

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