Question
The risk-free rate is 4 percent. The expected market rate of return is 11 percent. You estimate that a particular stock with beta equal to
The risk-free rate is 4 percent. The expected market rate of return is 11 percent. You estimate that a particular stock with beta equal to 1.0 will offer a rate of return of 11 percent. According to the CAPM, you should
A)buy the because it is underpriced.
B)sell short the stock because it is overpriced.
C)hold the stock because it is fairly priced.
D)cannot be determined from data provided.
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Enhancing Financial Inclusion Through Islamic Finance Volume II
Authors: Abdelrahman Elzahi Saaid Ali , Khalifa Mohamed Ali , Mohamed Hassan Azrag
1st Edition
3030399389,3030399397
