The expected return on the market portfolio is 13%. The risk-free rate is 6%. The expected return on SDA Corp. common stock is 12%. The beta of SDA Corp. common stock is 1.50. Within the context of the capital asset pricing model, .
A) SDA Stock is underpriced.
B) SDA stock is fairly priced.
C) SDA Corp. stock's alpha is –1.80%.
D) SDA stock's alpha is 1.8%.

-4.50%

Explanation:

As we know that

Expected Rate of Return = Risk Free Rate of Return + Beta × Market Risk Premium

where,

Market Risk Premium is

= Expected Return on Market Portfolio - Risk Free Rate

= 13% - 6%

= 7%

So, the expected rate of return is

= 6% + 1.50 × 7%

= 16.50%

And the expected return on SDA Corp. common stock is 12%

So, the SDA Corp stock alpha is -4.50%

which come from

= 12% - 16.50%

This is the answer and the options that are mentioned are wrong.

the specific actions take by the fed. what the fed was attempting to do by taking these actions. the result of the actions taken by the fed