24 points QUESTION 20

Show your work in detail to get full points You own a portfolio consting of the following stocks, Stock % of Portfolio Bota 1 JON 1.30 Return Expected 8 2 40 0.75 7x 3 30 1.20 9X The risk-free rate is 3% and the expected return on the market portfolio is 8% A. Which stocks are underpriced and which are overpriced? (1.2 point) B. Calculate the expected return on your portfolio. Then, calculate the portfolio's required rate of return based on CAPM. Why are these 2 numbers different? (1.2 point)