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Which is the most correctly priced by the CAPM model if the risk free rate of return is 4.0% and the market risk premium is

Which is the most correctly priced by the CAPM model if the risk free rate of return is 4.0% and the market risk premium is 8.5%? image text in transcribed
Which one of the following stocks is the most correctly priced by CAPM model if the risk-free rate of return is 4.0% and the market risk premium is 8.5%? Hint: Use the CAPM formula: Expected return = Risk free rate + (Beta Market risk premium) and find the stock for which CAPM model provides expected returns closest to the actual expected returns mentioned in the table. Stock Beta Expected Return A 0.79 12.30% 00 1.56 17.26% C 1.37 11.34% D 1.65 16.6896 8.65% E 0.95 Stock Stock E Stock D Stock B Stock A

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