oblem 8 (8 marks For each stock state whether it is overvalued, undervalued or correctly priced if the risk-free rate of return is 3.2% and the market risk premium is 8.4%. Also state your investment strategy (buy, sell, or hold Stock Beta Expected Return 0.72 1.46 1.38 1.01 8.62% 15.79% 14.79% 12.02% blem 9 (8 Marks) You are considering purchasing shares of GreenGro, a supplier of fresh produce. The stock just paid a dividend of $1.42 and dividends are expected to grow after that at an annual rate of 2%, forever. The stock has a correlation with the overall market of 0.70. The standard deviation of the stock's returns is 0.60 and the standard deviation of the overall market's returns is 0.375. The yield on T-Bills is 3%, and the return on the market portfolio is expected to be 11.5%. a) What should be the price of the stock assuming that the Capital Asset Pricing model is true? b) Suppose the stock is selling in the market at a price of $14.10, is it over-valued or under-valued? Explain what should happen to the stock price if the market is efficient. 3 /4 View as Text