Question
The risk-free rate of return is currently 5.6 percent and the market portfolio return is estimated to be 14.2 percent. The expected returns and betas
The risk-free rate of return is currently 5.6 percent and the market portfolio return is estimated to be 14.2 percent. The expected returns and betas of four shares are as follows:
| Share | Beta | Expected Return (%) |
|---|---|---|
| A | 1.20 | 15.62 |
| B | 1.44 | 17.98 |
| C | 1.45 | 18.07 |
| D | 1.47 | 18.24 |
According to CAPM which stocks are overvalued?
| Only D | ||
| Only B | ||
| D and B | ||
| C and D | ||
| Only A |
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Principles Of Housing Finance Reform
Authors: Susan M. Wachter, Joseph Tracy
1st Edition
0812248627, 978-0812248623
