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You have calculated that for a certain stock and risk model, the alpha is statistically significantly positive. This tells you that the stock price: a.
You have calculated that for a certain stock and risk model, the alpha is statistically significantly positive. This tells you that the stock price:
a.
is over-priced
b.
is under-priced
c.
is in line with the intrinsic value
d.
insufficient information to determine
e.
should be shorted
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