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The market rate of return is 1 2 percent and the risk - free rate of return is 4 percent. Astock that has 5 percent

The market rate of return is 12 percent and the risk-free rate of return is 4 percent. Astock that has 5 percent more risk than the market has an actual return of 12 percent.This stock:I. is underpriced.II. is overpriced.III. will plot below the security market line.IV. will plot above the security market line.

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