Please try to answer both in 30 minute just need final answer Your personal opinion is that security X has an expected rate of return of 0.16. Its beta isequal to 1.2. The risk-free rate is 0.03 and the market expected rate of return is 0.11.According to the Capital Asset Pricing Model, this securit isO a. underpriced.Ob. overpriced.Oc. faity prced.O d. cannot be determined from data provided.O e. none of the above. Investor Eliot buys shares of stock A for $10,000, while investor Michael takes a shortposition in stock A for $10,000. The price of stockAmay go down to zero or increase with noImit in the future. For whom of the two investors the maximal loss is bigger?O a. MichaelOb. EllotO. The maximal loss is the same for Michael and ElliotO d. cannot be delerminedO e. None of the above

solution dear student as per the Q&A guideline we are required to answer the first question only…

Answered: Dur personal opinion is that security X…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 57P

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Dur personal opinion is that security X has an expected rate of return of 0.16. Its bela is qual to 1.2. The risk-free rate is 0.03 and the market expected rate of return is 0.11. cording to the Capital Asset Pricing Model, this security is Da. underpriced. Ob. overpriced.