Your Opinion Is That CSCO Has an Expected Rate of Return

question 150

Multiple Choice

Your opinion is that CSCO has an expected rate of return of 0.13.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.
• E)none of the above.

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Definitions:

Hallucinogenic

Relating to substances that cause hallucinations, altering perception, thought, and feeling, and leading to experiences that differ from ordinary reality.

Depressant

A category of drugs that reduce the functioning of the central nervous system and produce feelings of relaxation and sedation.

Antibiotic

A type of medication used to prevent and treat bacterial infections by killing or inhibiting the growth of bacteria.

Meditation

A practice where an individual uses a technique – such as mindfulness, or focusing the mind on a particular object, thought, or activity – to train attention and awareness, and achieve a mentally clear and emotionally calm state.