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You are doing an analysis of MMG. You expect a return of 18%. MMG has a beta of 1.1, the T-bills earn 2%, and the
You are doing an analysis of MMG. You expect a return of 18%. MMG has a beta of 1.1, the T-bills earn 2%, and the expected return on the market is 15%. According to your analysis, MMG has an alpha of ____, it is _____, and you recommend to ________ shares.
A.) alpha = 1.7% ; underpriced ; buy
B.) alpha = 1.7% ; overpriced ; sell
C.) alpha = 1.7% ; overpriced ; sell
D.) alpha = 1.7% ; overpriced ; buy
E.) alpha = 1.7% ; underpriced ; buy
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