Question: Assume the capital asset pricing model ( CAPM ) sets the expected return for fairly valued securities . If an analyst determines a stock's expected
Assume the capital asset pricing model CAPM sets the expected return for fairly valued securities If an analyst determines a stock's expected return by another method and that return is higher than the stock's expected return as determined by the CAPM, then the analyst most likely should:
A buy the stock since it undervalued.
B sell the stock since it is overvalued.
C postpone action until the stock is fairly valued.
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