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Which of the following stocks is (are) incorrectly priced if the risk-free rate is 4% and the market risk premium is 6%? Stock A B

Which of the following stocks is (are) incorrectly priced if the risk-free rate is 4% and the market risk premium is 6%?

Stock

A

B

C

Beta

1.25

1.06

0.9

Expected Return

11.5%

10.7%

9.4%

A) A only

B) B only

C) C only

D) A and C only

E) A, B, and C

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