Question: 2 1 Multiple Choice 1 . 5 points The risk - free rate is 4 % . The expected market rate of return is 1

21
Multiple Choice
1.5 points
The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock x with a beta of .8 to offer a rate of return of 12%, then you should
buy stock x because it is overpriced
sell short stock x because it is underpriced
buy stock x because it is underpriced
sell short stock x because it is overpriced
Clear my selection
2 1 Multiple Choice 1 . 5 points The risk - free

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