Your Opinion Is That CSCO Has an Expected Rate of Return

question 50

Multiple Choice

Your opinion is that CSCO has an expected rate of return of 0.1375. 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.

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Definitions:

Behavioral Question

A type of question used by employers during interviews that asks the candidate to provide an example of a past experience to predict future behavior.

Direct Question

A straightforward inquiry that seeks a specific piece of information without ambiguity.

Skills

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