What is investment strategy

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Stock Y has a beta of 1.05 and an expected return of 12%. Stock Z has a beta of 0.68 and an expected return of 10.26%. If the risk-free rate is 5% and market risk premium is 7%, are these stocks correctly priced in the market? If not, then which one is overvalued and which one is undervalued, or what is your investment strategy, which one will you buy and which one should you sell? Why? Please explain clearly.

Reference no: EM131058007

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