The risk-free rate is 4 and the expected rate of return on, Ask an Expert

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The risk-free rate is 4% and the expected rate of return on the market portfolio is 9%.

a. Calculate the required rate of return on a security with a beta of 1.28. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Required return _________%

b. If the security is expected to return 12%, is it overpriced or underpriced?

Overpriced

Underpriced

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Financial Management, Finance

Category:- Financial Management
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