Your Opinion Is That CSCO Has an Expected Rate of Return

question 67

Multiple Choice

Your opinion is that CSCO has an expected rate of return of 0.15.It has a beta of 1.3.The risk-free rate is 0.04 and the market expected rate of return is 0.115.According to the Capital Asset Pricing Model, this security is

• A)underpriced.
• B)overpriced.
• C)fairly priced.
• D)Cannot be determined from data provided.

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Definitions:

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, involving the systematic assessment of evidence and arguments.

Performance Criteria

The standards by which the performance of a task, project, or individual is evaluated.

Understands Use Crutches

The knowledge and ability to properly use crutches to aid in mobility after an injury or surgery.

Pain Decreased

A reduction in the intensity or severity of pain experienced by an individual.