When Identifying Undervalued and Overvalued Assets, Which of the Following

Multiple Choice

When identifying undervalued and overvalued assets, which of the following statements is FALSE?

A) An asset is properly valued if its estimated rate of return is equal to its required rate of return.
B) An asset is considered overvalued if its estimated rate of return is below its required rate of return.
C) An asset is considered undervalued if its estimated rate of return is above its required rate of return.
D) An asset is considered overvalued if its required rate of return is below its estimated rate of return.
E) An asset is considered undervalued if its estimated rate of return is equal to its required rate of return.