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The risk-free rate is 6%. The expected market rate of return is 14%. If you expect stock X with a beta of 0.8 to offer
The risk-free rate is 6%. The expected market rate of return is 14%. If you expect stock X with a beta of 0.8 to offer a rate of return of 13% percent, investors will A) buy stock X because it is underpriced. B) sell stock X because it is overpriced. C) sell stock X because it is underpriced. D) buy stock X because it is overpriced. E) none of the above, as the stock is fairly priced.
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