Multiple Choice
Wilson Farms' stock has a beta of .73 and an expected return of 9.0%. The risk-free rate is 1.9% and the market risk premium is 7.3%. This stock is ________ because the CAPM return for the stock is ________%.
A) undervalued; 7.23
B) undervalued; 7.53
C) undervalued; 7.46
D) overvalued; 7.23
E) overvalued; 7.53
Correct Answer:
Verified
Correct Answer:
Verified
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