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Are the stocks priced correctly

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Reference no: EM132759950

Problem 1: Stock A has a beta of 1.2 and an expected return of 11.1%. Stock B has a beta of .80 and an expected return of 7.85%. The current risk-free rate is 2.4% and the market risk premium is 7.2%. Are the stocks priced correctly?

Reference no: EM132759950

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