The risk free rate is 6 and the expected market return is, Financial Management

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The risk free rate is 6 and the expected market return is

The risk free rate is 6%, and the expected market return is 15%. A stock with a beta of 1.2 is selling for $25 and will pay a $1 dividend at the end of the year. If the stock is priced at $30 at year end, it is: A. Overpriced, so short it B. Underpriced, so buy it C. Underpriced, so short it D. Overpriced, so buy it E. Fairly priced, so hold it.

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