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Are the stocks correctly priced

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Reference no: EM132509914

Question 1: Stock Y has a beta of 1.30 and an expected return of 13%. Stock Z has a beta of 0.75 and an expected return of 10.5%. If the risk-free rate is 4.5% and the market risk premium is 7.2%, are these stocks correctly priced?

Reference no: EM132509914

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