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The expected return on the market portfolio is 17%. The risk-free rate is 9%. The expected return on SDA Corp. common stock is 16%. The beta of SDA Corp. common stock is 1.80. Within the context of the capital asset pricing model:
1-SDA Stock is underpriced
2-SDA stock is fairly priced
3-SDA Corp. stock's alpha is –7.40%
4-SDA stock's alpha is 7.4%
which one is correct?
Apr 08 2020 Read more Less More
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