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The risk - free rate is 3 . 3 percent and the expected return on the market is 1 2 . 3 percent. Stock A

The risk-free rate is 3.3 percent and the expected return on the market is 12.3 percent. Stock A has a beta of 1.1 and an expected return of 14.1 percent. Stock B has a beta of 1.3 and an expected return of 15.0 percent. Are these stocks correctly priced? Why or why not? A. No, Both Stock A and B are overpriced. B. No, Stock A is underpriced but Stock B is correctly priced. C. No, Stock A is overpriced, and Stock B is underpriced. D. No, Stock A is overpriced but Stock B is correctly priced. E. No, Stock A is underpriced, and Stock B is overpriced.

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