Is the security fairly priced under priced or over priced

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Reference no: EM132073769

Question :

The risk free rate is 3%. The expected return of market portfolio is 8%. There is a security with current price being 30 dollars. Its beta is 0.6.

It is expected that the security will provide 0.5 dollar dividend in one year and the expected ex-dividend price in one year is 31 dollar.

Is the security fairly priced, under priced or over priced?

Reference no: EM132073769

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