### Expected return on the market portfolio

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##### Reference no: EM13909449

A stock has a beta of 2.0; the risk-free rate of return is 7%, and the expected return on the market portfolio is 12%. If this stock's expected return is 18%, the share are_____and their price will _____?

A) Underpriced, rise B) Underpriced, Fall C) Overpriced, Rise D) Overpriced, fall

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