An analyst evaluates the security market line (SML) and a stock with the following details:
Intercept of the SML: 2%
Slope of the SML: 5%
Stock's beta: 1.3
According to capital market theory, if the analyst projects the stock's return to be 7%, the stock is:
Exam-Like
A
undervalued.
33.3%
B
properly valued.
33.3%
C
overvalued.
33.3%
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An analyst evaluates the security market line (SML) and a stock with the following details:
- Intercept of the SML: 2%
- Slope of the SML: 5%
- Stock's beta: 1.3
According to capital market theory, if the analyst projects the stock's return to be 7%, the stock is: | Chartered Financial Analyst Level 1 Quiz - LeetQuiz