Your Opinion Is That Security a Has an Expected Rate

question 23

Multiple Choice

Your opinion is that security A has an expected rate of return of 0.145. It has a beta of 1.5. The risk-free rate is 0.04, and the market expected rate of return is 0.11. According to the Capital Asset Pricing Model, this security is

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