Compute the required return of a security with a beta

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Reference no: EM1358487

The risk-free rate is 4% and the expected rate of return on the market portfolio is 9%.

a. Calculate the required return of a security with a beta of 1.21 and an expected rate of return of 13%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Is the security overpriced or underpriced?

Reference no: EM1358487

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