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Assume that the risk-free rate is 7%, and the market risk premium is 8%. Also assume...

Assume that the risk-free rate is 7%, and the market risk premium is 8%. Also assume that after careful analysis, you believe that FBF Limited ordinary shares will return 17% next year. The beta for the stock is 1.5. You should:

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As,FBF limited stocks CAPM return 19% is more than expected return 17% then the stock is overvalued,the investor should sell the stock.

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