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The risk-free rate of return is currently 3 percent, whereas the market risk premium is 6 percent. If the beta of Lenz, Inc., stock is
The risk-free rate of return is currently 3 percent, whereas the market risk premium is 6 percent. If the beta of Lenz, Inc., stock is 1.7, then what is the expected return on Lenz? Suppose this stock has an expected return of 10%. Is this security properly priced? A) 11.85%, overpriced B) 10.80%, overpriced C) 9.85%, underpriced D) 8.20%, underpriced oc OD
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