Wilson Farms' Stock Has a Beta of

question 86

Multiple Choice

Wilson Farms' stock has a beta of .73 and an expected return of 9.0%. The risk-free rate is 1.9% and the market risk premium is 7.3%. This stock is ________ because the CAPM return for the stock is ________%.

• A)undervalued; 7.23
• B)undervalued; 7.53
• C)undervalued; 7.46
• D)overvalued; 7.23
• E)overvalued; 7.53

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Definitions:

Effortful Control

The ability to regulate one's emotions and actions through effort rather than instinct.

Self-regulatory Behavior

Actions undertaken by an individual to control their thoughts, feelings, and actions in pursuit of long-term goals.

Goldfish Cracker

A small, fish-shaped cheese cracker that is a popular snack food among children, often noted for its mild flavor and crunchy texture.

Effortful Control

The ability to regulate one's responses to external stimuli, including suppressing inappropriate actions.