Problem $3$: Models and Mis$-$pricings

The expected return of the market is E$($rM$)=14\%,$ while the risk$-$free rate is rf $=6\%.$

Stock $\backslash$beta E$($r$)$ Stock is one on left and E$($r$)$ is one on right which is the percentage.

A $115\%$

B $0\mathrm{.}712\%$

C $0\mathrm{.}510\%$

D $1\mathrm{.}215\%$

E $1\mathrm{.}417\%$

F $1\mathrm{.}518\%$

$1.$ Which assets are correctly priced according to the CAPM? Which ones are under$-$priced?

Which ones are over$-$priced?

$2.$ Using all under$-$priced securities$,$ what is the alpha of an equally$-$weighted portfolio? Is it

under$-$priced?

$3.$ Using all over$-$priced securities$,$ what is the alpha of an equally$-$weighted portfolio? Is it

over$-$priced?

$$First estimate the expected return of portfolio Z using the expected return of the stocks. Then, compare i