A Particular Asset Has a Beta of 1

question 2

Multiple Choice

A particular asset has a beta of 1.2 and an expected return of 10%.The expected return on the market portfolio is 13% and the risk-free is 5%.The stock is

• A) overpriced
• B) underpriced
• C) appropriately priced
• D) Cannot tell from the given information

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Definitions:

Volcanic Origin

Refers to landscapes, geological features, or materials that have formed as a result of volcanic activity, including eruptions, lava flows, and ash deposits.

Seafloor

The bottom of the ocean, covering a vast area and including features like plains, mountains, and trenches.

Continental Shelves

The underwater landmasses that extend around the continents, typically extending from the shore to a drop-off point known as the shelf break.

Abyssal Plains

Large, flat areas of the ocean floor that are among the deepest, most remote parts of the Earth's surface.