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Suppose the rate of return on short-term government securities perceived to brike) is about . Suppose to that the expected rate of returnered by the

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Suppose the rate of return on short-term government securities perceived to brike) is about . Suppose to that the expected rate of returnered by the marvet for a portfolio with a bota of tis 18% According to the capital asset pricing model What is the expected rate of return on the market portfolio Round your answer to 2 wer to 2 decimal places. Expected to return b. What would be the expected rate of retum on a stock with B 07 (Round your answer to 2 decimal places) Expected rate of retum c. Suppose you consider buying a share of stock at $56. The stock is expected to pay $2 dividends next year and you expect it to sell then for $58. The stock risk has been evaluated at 3-5. Is the stock overpriced or underprod? Underpriced Overed

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