Your Opinion Is That Security C Has an Expected Rate

question 78

Multiple Choice

Your opinion is that security C has an expected rate of return of 0.106.It has a beta of 1.1.The risk-free rate is 0.04 and the market expected rate of return is 0.10.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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