Use the capm model and identify

Reference no: EM13280086

Stock X has a beta of 1.35 and an expected return of 14%. Stock Y has a beta of 0.85 and an expected return of 11.5%. Assume the risk free rate is 2% and the market risk premium is 6.8%. Use the CAPM model and identify whether the stocks are correctly priced.

Reference no: EM13280086

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