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You believe that Ace stock is mispriced. The stock has a beta of 1.2 and you believe the stock will provide a return of 14%

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You believe that Ace stock is mispriced. The stock has a beta of 1.2 and you believe the stock will provide a return of 14% this year. T-bills are paying 4% and the market portfolio is paying 12%. Given this data, which one of the following statements is correct? (Think about this one) a. You should sell Ace stock because its return per unit of risk is lower than for the market. b. You should sell Ace stock because its required return is only 13.6%. c. You should buy Ace stock because its expected return is higher than the return on the market portfolio, ensuring that it will make money. d. You should buy Ace stock because it is undervalued

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