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The expected return on the market portfolio is 14%. The risk-free rate is 7%. The expected return on SDA Corp. common stock is 13%. The beta of SDA Corp. common stock is 1.60. Within the context of the capital asset pricing model, _________.

a. SDA Stock is underpriced

b. SDA stock is fairly priced

c. SDA Corp. stock's alpha is –5.20%

d. SDA stock's alpha is 5.2%

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Financial Management, Finance

Category:- Financial Management
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