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Suppose you observe the following situation. If the risk-free rate is 7 percent, are these securities correctly priced based on the CAPM Security Beta E(return)

Suppose you observe the following situation. If the risk-free rate is 7 percent, are these securities correctly priced based on the CAPM

Security Beta E(return)

A 1.8 22%

B 1.6 20.44%

Which answer is correct?

A: Yes

B: No

C: Uncertain

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