The risk-free rate is 2.5 percent and the return on the market is 11 percent. Stock X has a beta of 1.6 and a return
The risk-free rate is 2.5 percent and the return on the market is 11 percent. Stock X has a beta of 1.6 and a return of 15.7 percent. Stock Y has a beta of 0.9 and a return of 11.5 percent. Are these stocks correctly priced?
Group of answer choices
No; Stock X is overpriced but stock Y is correctly priced.
No; Stock X is overpriced and stock Y is underpriced.
No; Stock X is underpriced and stock Y is overpriced.
Yes; both Stock X and stock Y are correctly priced.
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Authors: Dave Ramsey
3rd Edition
1936948524, 978-1936948529
