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You are considering investing in two stocks. Stock A has an expected return 5% and stock B has an expected return of 4,9%. Stock A

You are considering investing in two stocks. Stock A has an expected return 5% and stock B has an expected return of 4,9%. Stock A has a beta of 1.1 and stock B has a beta of 0,9. Are the two stocks correctly priced if the return of the market is 5% and the risk free rate is 3%? Why or why not? Show your work.

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