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Stock Z has a beta of 0.5 and an expected return of 8%. If Treasury Bills...

Stock Z has a beta of 0.5 and an expected return of 8%. If Treasury Bills currently return 1% and the expected return on the S&P 500 is 7%, is this stock correctly priced, underpriced, or overpriced? Graph the security market line and Stock Z. Label all relevant details. Explain the concept of market efficiency using your graph.

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