QUESTION $5$

Your personal opinion is that a security has an expected rate of return of $0\mathrm{.}12.$ It has a beta of $1\mathrm{.}5.$ The risk$-$free rate is $0\mathrm{.}05$ and the market expected rate of return is $0\mathrm{.}09.$ According to the Capital Asset Pricing Model, this security is

A$.$ underpriced.

B$.$ overpriced.

C$.$ fairly priced.

D$.$ cannot be determined from data provided.

E$.$ can either be overpriced or underpriced but not fairly priced.

QUESTION $6$

A coupon bond that pays interest semiannually has a par value of $$1,000,$ matures in $8$ years, and has a yield to maturity of $6\%.$ If the coupon rate is $7\%,$ the intrinsic value of the bond today will be $q,$

A$.$ $$1,000$

B$.$ $$1,062\mathrm{.}81$

C$.$ $$1,081\mathrm{.}82$

D$.$ $$1,100\mathrm{.}03$

E$.$ $$1,074\mathrm{.}60$