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Stock Y has a beta of 1.28 and an expected return of 13.7 percent. Stock Z has a beta of 1.02 and an expected return
Stock Y has a beta of 1.28 and an expected return of 13.7 percent. Stock Z has a beta of 1.02 and an expected return of 11.4 percent. If the risk-free rate is 4.1 percent and the market risk premium is 7 percent, are these stocks correctly priced? Both stocks Y and Z are overvalued. Both stocks Y and Z are undervalued. Stock Y is overvalued and stock Z is undervalued. Stock Y is undervalued and stock Z is overvalued. O Both stocks Y and Z are correctly priced
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