The risk-free rate is 4%. The expected market rate of return is 11%. If you expect...

The risk-free rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of 1.0 to offer a rate of return of 11%, you should:

buy CAT because it is overpriced

sell short CAT because it is overpriced

sell stock short CAT because it is underpriced

buy CAT because it is underpriced

hold CAT because it is fairly priced

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jeff jeffy answered 1 year ago

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