An analyst gathers the following information about four stocks.
The analyst estimates that the risk-flee rate is 5%, and the return on the market portfolio is 12%. Based on the above inputs and the capital asset pricing model (CAPM) , which of the following statements about the valuation of the four stocks is most accurate Stock A Stock B Stock C Stock D()
A. Undervalued Overvalued Properly valued Undervalued
B. Undervalued Properly valued Overvalued Overvalued
C. Overvalued Properly valued Undervalued Undervalued
参考答案：C
解析：
According to the SML equation, the following expected (required) rates of return for these four stocks are :
RA=0.05+0.6×(0.12-0.05)=0.092 or 9.2%
RB=0.05+1.0×(0.12-0.05)=0.120 or 12.0%
RC=0.05+1.2×(0.12-0.05)=0.134 or 13.4%
RD=0.05+1.8×(0.12-0.05)=0.176 or 17.6%
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