Determining the security fairly priced

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The risk free rate is 3% per annum. The expected return of market portfolio is 9% per annum. There is a security with current price being 10 dollars. Its beta is 1.1. It is expected that the security will provide 0.15 dollar dividend in 6 months and the expected ex-dividend price in 6 months is 10.4 dollar. Assume there is no tax. Is the security fairly priced, under priced or over priced?

Reference no: EM132596224

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