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Which one of the following stocks is correctly priced if the risk-free rate of return is 2.5 percent and the market risk premium is 7.80
Which one of the following stocks is correctly priced if the risk-free rate of return is 2.5 percent and the market risk premium is 7.80 percent?
Stock | Beta | Expected Return |
A | 0.73 | 8.61% |
B | 1.47 | 13.90% |
C | 1.39 | 13.34% |
D | 1.04 | 10.53% |
E | 0.96 | 9.84% |
Stock B
Stock D
Stock A
Stock E
Stock C
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