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The risk-free rate is 4 percent. The expected market rate of return is 11 percent. If you expect CAT with a beta of 1.0 to
The risk-free rate is 4 percent. The expected market rate of return is 11 percent. If you expect CAT with a beta of 1.0 to offer a rate of return of 11 percent, you should O buy stock X because it is overpriced. O sell short stock X because it is overpriced. O sell stock short X because it is underpriced. O buy stock X because it is underpriced. O none of the above, as the stock is fairly priced
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