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    Fundamentals Of Corporate Finance Study Set 21
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    Exam 13: Return, Risk, and the Security Market Line
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    The Market Rate of Return Is 12% and the Risk-Free
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The Market Rate of Return Is 12% and the Risk-Free

Question 209

Question 209

True/False

The market rate of return is 12% and the risk-free rate of return is 4%. A stock that has 5% more risk than the market has an actual return of 12%. Given this information, the stock is underpriced.

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