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Stock A ( with an expected return of 1 5 % and a beta of 1 . 1 ) and stock B ( with an

Stock A (with an expected return of 15% and a beta of 1.1) and stock B (with an expected return of 20% and beta 1.6) are correctly priced. By how much is stock C under-priced (expressed in terms of excess return relative to the SML), if it has a beta of 1 and expected return of 16%?

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