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If the risk-free rate is 6 percent and the market risk

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Stock Y has a beta of 1.25 and an expected return of 14 percent. Stock Z has a beta of .70 and an expected return of 9 percent.

If the risk-free rate is 6 percent and the market risk premium is 7 percent, are these stocks correctly priced?

Reference no: EM131126401

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