Assume the Following Data for a Stock: Beta = 0

question 55

Multiple Choice

Assume the following data for a stock: Beta = 0.9; risk-free rate = 4 percent; market rate of return = 14 percent; and expected rate of return on the stock = 13 percent. Then the stock is

• A)overpriced.
• B)underpriced.
• C)correctly priced.
• D)The answer cannot be determined.

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