Q#25 The beta of Ricci Co.'s stock is 2.8, whereas the risk-free rate of return is 8 percent. If the expected return on the market is 17 percent, then what is the expected return on Ricci Co.? Suppose this stock has an expected return of 40%. Is this security properly priced? |
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A) | 42.80%, overpriced |
B) | 33.20%, overpriced |
C) | 42.80%, underpriced |
D) | 33.20%, underpriced |
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