Your opinion is that CSCO has an expected rate of return of 0.1375.It has a beta of 1.3.The risk-free rate is 0.04 and the market expected rate of return is 0.115.According to the Capital Asset Pricing Model,this security is
A) underpriced by 10%.
B) overpriced.
C) fairly priced.
D) cannot be determined from data provided.
E) underpriced by 5%.

Question

Quizplus · Accepted Answer

The Answer of Your opinion is that CSCO has an expected rate of return of 0.1375.It has a beta of 1.3.The risk-free rate is 0.04 and the market expected rate of return is 0.115.According to the Capital Asset Pricing Model,this security is
A) underpriced by 10%.
B) overpriced.
C) fairly priced.
D) cannot be determined from data provided.
E) underpriced by 5%.

Your Opinion Is That CSCO Has an Expected Rate of Return