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Which one of the following stocks is correctly priced if the risk-free rate of return is 4 percent and the market risk premium is 6.5

Which one of the following stocks is correctly priced if the risk-free rate of return is 4 percent and the market risk premium is 6.5 percent?

Stock

Beta

Expected Return

A

0.68

8.42%

B

1.42

13.9%

C

1.23

11.8%

D

1.31

12.6%

E

0.94

9.7%

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