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Stock Y has a beta of 1 . 2 and an expected return of 1 1 . 5 percent. Stock z has a beta of

Stock Y has a beta of 1.2 and an expected return of 11.5 percent. Stock z has a beta of .80 and an expected return of 8.5 percent. If the risk-free rate is 3.2 percent and the market risk premium is 6.8 percent , are these stocks correctly priced? Show work and Explain.

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