Assume that the CAPM is a good description of stock
Assume that the CAPM is a good description of stock price returns. The market expected return is 7% with 10% volatility and the risk-free rate is 3%. New news arrives that does not change any of these numbers but it does change the expected return of the following stocks:


a. At current market prices, which stocks represent buying opportunities?
b. On which stocks should you put a sell orderin?
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