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The coefficient of correlation between Stock A and the S&P 500 is 0.28. The returns on the S&P500 have a standard deviation of 0.07, and
The coefficient of correlation between Stock A and the S\&P 500 is 0.28. The returns on the S\&P500 have a standard deviation of 0.07, and the returns on Stock A have a standard deviation of 0.50. What is the market beta of Stock A? Stock XYZ has an expected return of 3.0%. The S\&P500 has an expected return of 9.0%. The riskless rate is 8.0% and XYZ 's beta is 8.0. Is XYZ overpriced or underpriced according to CAPM? Answer 1 for underpriced and - 1 for overpriced
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