1. Use the following information to answer the questions. Security Beta Standard Deviation Expected return Market 1.0 20% 10.0% Risk-free 0.0 0% 4.0% Stock A 0.8 15% ()% Stock B () 30% 14.0% Stock C 1.2 25% ()% Stock D 2.0 40% ()% 1) Stock C has the average return of 12% while Stock D has the average return of 15%. i) Figure out the abnormal return, alpha (a) for Stocks C. ii) Determine whether Stock D is underpriced or overpriced based on the alpha