The risk-free rate is 4%. the expected market rate of return is 11%. if you expect stock x with a beta of .8 to offer a rate of return of 12 percent, then you should
a) buy stock x because it is overpriced
b) buy stock x because it is underpriced
c) sell short stock x because it is overpriced
d) sell short stock x because it is underpriced
e) stock x is correctly priced

The master manufacturing company has just announced a tender offer for its own common stock. master is offering to buy up to 100% of the company's stock at $20 per share contingent on at least 64% of the outstanding shares being tendered. after the announcement of the offer, the stock closed on the nyse up 2.50 at $18.75. a customer has 100 shares of master stock in his cash account. the customer tells you that he wishes to "cash out" his position. you should recommend that the customer: