Question: You are given following information on beta and expected return for each stock: Stock A: beta=0.98, expected return=0.167. Stock B: beta=1.12, expected return=0.092. Stock C:

You are given following information on beta and expected return for

You are given following information on beta and expected return for each stock: Stock A: beta=0.98, expected return=0.167. Stock B: beta=1.12, expected return=0.092. Stock C: beta=1.56, expected return=0.181. Stock D: beta=1.02, expected return=0.1862. Stock E: beta-1.14, expected return=0.109. If the risk free rate of return is 4.2 percent and the market risk premium is 8.9 percent, which one of these stocks is correctly priced according to CAPM? a. E b. D OC.A d. B c e. C

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