Question: Continue using the stock JMJM information from the previous question: Stock JMJM has a beta of 0.78 and is currently priced at $40. The stock

 Continue using the stock JMJM information from the previous question: Stock

Continue using the stock JMJM information from the previous question: Stock JMJM has a beta of 0.78 and is currently priced at $40. The stock is estimated to pay $1.00 dividend and be selling for $41.80 in one year's time. The risk free rate is 3%. The market expected return is 9%. Given the reward-to-risk ratio you just obtained, stock JMJM is currently and is located the Security Market Line. correctly priced; on overpriced; below overpriced; on underpriced; above

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