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Homework answers / question archive / 1) From the following information, determine whether or not stock B is over- or under-valued
1) From the following information, determine whether or not stock B is over- or under-valued. Why?
2)Referring to the information given above, how will stock B move toward the equilibrium price?
From the following information, determine whether or not stock B is over- or under-valued. Why? Risk-free rate is 6% and the market return is 9% Stock A Stock B Beta 0.70 1.00 Actual Return 6.20% Stock 1.15 15.15% Stock D 1.40 5.15% Stock E -3.30 6% 8% Referring to the information given above, how will stock B move toward the equilibrium price?
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