AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 240 Topic 25 Discussion

AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 240 Topic 25 Discussion

CWM_LEVEL_2 Exam Topic 25 Question 240 Discussion:
Question #: 240
Topic #: 25

Section B (2 Mark)

A stock with a Beta of 0.7 currently priced at Rs 50 is expected to increase in price to Rs 55 by year end and pay Rs 1 as dividend. The expected market return is 15% and the risk free rate is 8%. The stock is:


A.

Overpriced, so do not buy it


B.

Underpriced, so buy it


C.

Properly priced so buy it


D.

Properly Priced so do not buy it


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