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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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