Stock FM has a historical return of 14.25%, a standard deviation of 14.1% and a correlation coefficient of 0.51 with the

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Stock Fm Has A Historical Return Of 14 25 A Standard Deviation Of 14 1 And A Correlation Coefficient Of 0 51 With The 1 (36.12 KiB) Viewed 114 times

Stock FM has a historical return of 14.25%, a standard deviation of 14.1% and a correlation coefficient of 0.51 with the market. The standard deviation of market return is 14.1%, and the expected return is 15.13%. The risk-free rate is 5.63%. Which of the following statement is correct. (Please retain at least 4 decimal places in your calculations and at least 2 decimal places in the final answer.) a. Stock FM is overpriced with a required rate of return of 9.21%. O b. Stock FM is underpriced with a required rate of return of 9.21% O c. Stock FM is overpriced with a required rate of return of 10.48%. O d. Stock FM is underpriced with a required rate of return of 10.48%. e. Insufficient information.