Question: I dont get the answer, I want the answer. The expected returns and betas of two stocks A & B are shown in the table
I dont get the answer, I want the answer.
The expected returns and betas of two stocks A & B are shown in the table below. The expected market return as represented by the S&P 500 is 10% and the risk-free rate is 5%, which of the following statements is FALSE? Stock Expected ReturnBeta 11% 1.2 14% 1.5 O Stock A is better deal because it's less risky The fair value return of stock A is 11% O Stock B can be bought at a bargain The fair-value return of stock B is 12.5% O Stock A is fairly priced
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