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rate of return

/in /by

Question

The risk-free rate is 8% and the expected rate of return on the market portfolio is

15%.

a. Calculate the required rate of return on a security with a beta of 1.30. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Required return %?

 If the security is expected to return 18%, is it overpriced or underpriced?

 
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