Question: Problem 12-11 CAPM and Expected Return (LO2) The risk-free rate is 4% and the expected rate of return on the market portfolio is 10% a.

Problem 12-11 CAPM and Expected Return (LO2) The risk-free rate is 4% and the expected rate of return on the market portfolio is 10% a. Calculate the required rate of return on a security with a beta of 1.45. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Required return % b. If the security is expected to return 13%, is it overpriced or underpriced? Underpriced Overpriced

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