Question
Stock Y has a beta of 1.6 and an expected return of 16 percent. Stock Z has a beta of 0.95 and an expected return
| Stock Y has a beta of 1.6 and an expected return of 16 percent. Stock Z has a beta of 0.95 and an expected return of 11.7 percent. |
| Required: |
| If the risk-free rate is 4.7 percent and the market risk premium is 7.2 percent, are these stocks correctly priced? |
| Stock Y | (Click to select)undervaluedovervalued |
| Stock Z | (Click to select)undervaluedovervalued |
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Behavioral Finance And Asset Prices
Authors: David Bourghelle, Pascal Grandin, Fredj Jawadi, Philippe Rozin
1st Edition
3031244850, 978-3031244858
