If a stock is under priced it would plot:
A) Above the security market line
B) Below the security market line
C) On the security market line
D) On the Y-axis

Name: If a stock is under priced it would plot: A) Above the security market line B) Below the security market line C) On the security market line D) On the Y-axis
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Question

Quizplus · Accepted Answer

An underpriced stock would plot above the security market line because it offers a higher expected return for its level of risk compared to the market.

If a Stock Is Under Priced It Would Plot