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Assume the Following Data for a Stock: Beta = 0

Question 23

Multiple Choice

Assume the following data for a stock: Beta = 0.5; risk-free rate = 4 percent; market rate of return = 12 percent; and expected rate of return on the stock = 10 percent. Then the stock is


A) overpriced.
B) underpriced.
C) correctly priced.
D) The answer cannot be determined.

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