- 9 Stock Pdq Has A Beta Of 6 The Expected Return On The Market Portfolio Is 12 And The Risk Free Rate Is 4 You Have 1 (253.24 KiB) Viewed 35 times
9. Stock PDQ has a beta of .6. The expected return on the market portfolio is 12% and the risk-free rate is 4%. You have
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9. Stock PDQ has a beta of .6. The expected return on the market portfolio is 12% and the risk-free rate is 4%. You have
9. Stock PDQ has a beta of .6. The expected return on the market portfolio is 12% and the risk-free rate is 4%. You have been analyzing Stock PDQ for years and your financial modeling has convinced you that the expected return on Stock PDQ is 11.2%. Which of the following is true? a. Your expected return on PDQ exceeds the required expected return and you should invest in it b. Stock PDQ lies below the SML, so the stock is underpriced and you should buy it c. Stock PDQ lies above the SML, so the stock is overpriced and you should not buy it d. None of the above