Hi,
Something I am unclear on is how to know what is over and undervalued.
In an equity related question if a If a s tock’s intrinsic value is greater than its market value, the stock is undervalued.
However I got this wrong in the question as I had just finished portfolio mangement where, after computing CAPM, if the intrinsic value return is greater than expected return then it is over valued.
I guess these are different concepts entirely and I got confused?