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The expected market rate of return is 12%, and the risk free rate is 4%. Stock A has a beta of 1.3. If the stock
The expected market rate of return is 12%, and the risk free rate is 4%. Stock A has a beta of 1.3. If the stock is currently priced to yield a return of 16% (observed expected return), then: OA. The stock lies on the SML OB. The stock lies below the SML OC. The stock is overpriced OD. The stock is fairly priced OE. The stock is underpriced
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