The risk-free rate is

5%

. The expected market rate of return is

11%

. If you expect stock

x

with a beta of 2.1 to offer a rate of return of

15%

, you should\ buy stock

x

because it is overpriced.\ sell short stock

x

because it is overpriced.\ sell short stock

x

because it is underpriced.\ buy stock

x

because it is underpriced.

The risk-free rate is 5%. The expected market rate of return is 11%. If you expect stock X with a beta of 2.1 to offer a rate of return of 15%, you should buy stock X because it is overpriced. sell short stock X because it is overpriced. sell short stock X because it is underpriced. buy stock X because it is underpriced. The risk-free rate is 5%. The expected market rate of return is 11%. If you expect stock X with a beta of 2.1 to offer a rate of return of 15%, you should buy stock X because it is overpriced. sell short stock X because it is overpriced. sell short stock X because it is underpriced. buy stock X because it is underpriced