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Suppose E(Rm)=10%, risk-free rate=5% Security A: beta=-0.2, offers an expected return=2.5% Security B: beta=1.5, offers an expected return=15% Which security is underpriced and which is
Suppose E(Rm)=10%, risk-free rate=5% Security A: beta=-0.2, offers an expected return=2.5% Security B: beta=1.5, offers an expected return=15% Which security is underpriced and which is overpriced? Security A: overpriced; Security B: underpriced O Security A: underpriced; Security B: underpriced Security A: overpriced; Security B: overpriced Security A: underpriced; Security B: overpriced
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