Suppose a stock has a beta of 1.4, and its expected return is 15% predicted...
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Suppose a stock has a beta of 1.4, and its expected return is 15% predicted by your fundamental research. Within the context of the CAPM, and use the security market line (SML) graph, is this stock underpriced, fairly priced or overpriced? Should you buy, sell, or hold the stock? Please show detailed calculations leading to your answers.
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