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Security X has an expected rate of return of 13% and a beta of 1.15. The risk-free rate is 5%, and the market expected rate of return is 15%. According to the capital asset pricing model, security X is ________.

A) fairly priced
B) overpriced
C) underpriced
D) None of the above

User Gndlp
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Answer:

B) overpriced

Step-by-step explanation:

Please see attachment

Security X has an expected rate of return of 13% and a beta of 1.15. The risk-free-example-1
User Timo Tijhof
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