If the risk free rate is 5 percent and the market risk


Stock y has a beta of 1.5 and an expected return of 13 percent, stock z has a beta of 7.0 and an expected return of 9 percent. if the risk free rate is 5 percent and the market risk premium is 7 percent, are these stocks correctly priced.

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Financial Management: If the risk free rate is 5 percent and the market risk
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