The market rate of return is 11 percent and the risk-free rate of return is 3 percent. Lexant stock has 3 percent less systematic risk than the market and has an actual return of 12 percent. This stock:
A. is underpriced.
B. is correctly priced.
C. will plot below the security market line.
D. will plot on the security market line.
E. will plot to the right of the overall market on a security market line graph.
Ans: A. is underpriced.
Business
You might also like to view...
The "mommy track," "mommy wars," glass ceilings, and pink-collar ghettos still affect employment of women as much as they used to, especially in the public relations field
Indicate whether the statement is true or false
Business
In a private trial, the referee is empowered by statute to enter a legally binding judgment
Indicate whether the statement is true or false
Business