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The risk-free rate is 5% and the expected rate of retum on the market portfolio is 12%. A security has a beta of 1.35 .

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The risk-free rate is 5% and the expected rate of retum on the market portfolio is 12%. A security has a beta of 1.35 . a) Calculate the required rate of return on the security. ( 5 pts) b) If the expected retum on the security is 15%, is the security overpriced or underpriced? ( 5 pts) Input your answer with two decimals. Answer %

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