Stock Y has a beta of 1.2. An expected return of 11.4%. Stock Z has a beta of .8 and an expected return of 8%. If the risk free rate is 2.5% and the market risk premium is 7%, are these stocks priced correctly? If not, what should the correct prices be? pls type in computer. Thanks

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
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Stock Y has a beta of 1.2. An expected return of 11.4%. Stock Z has a beta of .8 and an expected return of 8%. If the risk free rate is 2.5% and the market risk premium is 7%, are these stocks priced correctly? If not, what should the correct prices be?

pls type in computer. Thanks

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