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Suppose that the risk - free rate is 3 % and the expected return on the market portfolio is 1 0 % . A certain
Suppose that the riskfree rate is and the expected return on the market portfolio is A certain stock has a beta of You believe that over the next year this stock will produce a return of Would you say that the stock is overpriced or underpriced?
According to CAPM, the return that the stock should earn is Enter as a percentage and round to one decimal place. PLEASE ANSWER BOTH PROBLEMS
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