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(11) Assume that the capital market line is as follows: 4,00 + 13,5B Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security Return 20 20 A 50 D 25 E 31

(11) Assume that the capital market line is as follows: 4,00 + 13,5B Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security Return 20 20 A 50 D 25 E 31

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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(111) Assume that the capital market line is as follows: 4,00 + 13,5ß Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security A Return 20 20 50 25 E 31
Transcribed Image Text:(111) Assume that the capital market line is as follows: 4,00 + 13,5ß Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security A Return 20 20 50 25 E 31
(b) A portfolio consists of securities as follows: Average buying price (RM) 4.00 8.00 Security Beta Units Current market price (RM) 4.80 9.60 1.3 30,000 10,000 80,000 200,000 150,000 A 1.2 1.3 1.5 1.20 0.50 0.20 3.20 0.30 D E 1.6 0.10
Transcribed Image Text:(b) A portfolio consists of securities as follows: Average buying price (RM) 4.00 8.00 Security Beta Units Current market price (RM) 4.80 9.60 1.3 30,000 10,000 80,000 200,000 150,000 A 1.2 1.3 1.5 1.20 0.50 0.20 3.20 0.30 D E 1.6 0.10
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