The common stock of TD Bank has a beta of 11 and an expected return of 12.35%. The risk-free rate of return is 3.5% and the market rate of return is 9.5%Which one of the following statements s true given this information?Multiple ChoiceOTD Bank's stock is underpricedOThe expected return on TD Bank's stock based on the Capital Asset Pricing Model is 13 95%The return on TD Bank's stock will graph below the Security Market LineMultiple ChoiceTD Bank's stock is correctly priced.TD Bank's stock is underpricedThe expected return on TD Bank's stock based on the Capital Asset Pricing Model is 13.95%The return on TD Bank's stock will graph below the Security Market LineTD Bank's stock is correctly priced.TD Bank stock has less systematic risk than the overall marketŐ

Here we have Beta = 1.1 Risk-free Return (Rf)= 3.5% Risk of Market return (Rm)= 9.5% Expected Rate…

The common stock of TD Bank has a beta of 11 and an expected return of 12.35%. The risk-free rate of return is 3.5% and the market rate of return is 9.5% Which one of the following statements is true given this information?

The common stock of TD Bank has a beta of 11 and an expected return of 12.35%. The risk-free rate of return is 3.5% and the market rate of return is 9.5% Which one of the following statements is true given this information?

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

Problem 1PS

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Question

The common stock of TD Bank has a beta of 11 and an expected return of 12.35%. The risk-free rate of return is 3.5% and the market rate of return is 9.5%
Which one of the following statements s true given this information?
Multiple Choice
O
TD Bank's stock is underpriced
O
The expected return on TD Bank's stock based on the Capital Asset Pricing Model is 13 95%
The return on TD Bank's stock will graph below the Security Market Line
Multiple Choice
TD Bank's stock is correctly priced.
TD Bank's stock is underpriced
The expected return on TD Bank's stock based on the Capital Asset Pricing Model is 13.95%
The return on TD Bank's stock will graph below the Security Market Line
TD Bank's stock is correctly priced.
TD Bank stock has less systematic risk than the overall market
Ő

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