Question: Solve Below is a plot of expected returns (y-axis) against Beta (x-axis) for securities. The blue line is the Security Market Line (SML) according to

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Below is a plot of expected returns (y-axis) against Beta (x-axis) for securities. The blue line is the Security Market Line (SML) according to CAPM. A and B are two securities. Which statements regarding A and B are correct? Select all two correct answers. 25% 20% SML 15% .B E(R ) A 10% 5% Rf 0% 0 0.5 1 1.5 2 2.5 Beta O A has a positive alpha O A is overpriced O B has a positive alpha O B is overpriced

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