Investors expect the market rate of return this year to be 14%.A stock with a Beta of .8 has an expected rate of return on the market portfolio is 11%,is a security with a Beta of 1.25 and an expected rate of return of 11% overpriced or underpriced?

Question

Quizplus · Accepted Answer

The Answer of Investors expect the market rate of return this year to be 14%.A stock with a Beta of .8 has an expected rate of return on the market portfolio is 11%,is a security with a Beta of 1.25 and an expected rate of return of 11% overpriced or underpriced?

Investors Expect the Market Rate of Return This Year to Be