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Calculate the required rate of return on a security

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Reference no: EM132804504

The risk-free rate is 5% and the expected rate of return on the market portfolio is 12%.

a.? Calculate the required rate of return on a security with a beta of 1.35. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. If the security is expected to return 15%, is it overpriced or underpriced?

Reference no: EM132804504

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