Stock Y has a beta of 1.2. An expected return of 11.4%. Stock Z has...
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Stock Y has a beta of 1.2. An expected return of 11.4%. Stock Z has a beta of .8 and an expected return of 8%. If the risk-free rate is 2.5% and the market risk premium is 7%, are these stocks priced correctly? If not, what should the correct prices be?
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