Risk-free rate and market risk premium

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Reference no: EM131581025

Stock Y has a beta of 1.2 and an expected return of 13.8 percent. Stock Z has a beta of 0.85 and an expected return of 11.7 percent.

Required: If the risk-free rate is 5.1 percent and the market risk premium is 7.6 percent, are these stocks correctly priced?

Reference no: EM131581025

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