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You believe that Alpha stock which has a beta of 1.5 will return 12.0% this coming year. The market is expected to return 11% and
You believe that Alpha stock which has a beta of 1.5 will return 12.0% this coming year. The market is expected to return 11% and T-bills return 5%. According to CAPM, which one of these statements is correct given this information? Multiple Choice The stock plots above the security market line. The risk premium is around zero given the stock's beta. The stock is currently underpriced. The stock plots to the right of the point of the market portfolio on a security market line graph
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