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The expected return on the market portfolio is 20%. The risk-free rate is 12%. The expected return on SDA Corp. common stock is 19%. The

The expected return on the market portfolio is 20%. The risk-free rate is 12%. The expected return on SDA Corp. common stock is 19%. The beta of SDA Corp. common stock is 1.20. Within the context of the capital asset pricing model, _________.

  • SDA Stock is underpriced

  • SDA stock is fairly priced

  • SDA stock's alpha is 2.6%

  • SDA Corp. stock's alpha is 2.60%

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