3. (a) The following information describes the expected return and risk relationship for two stocks. Expected Return Standard Deviation Beta Stock X 15.0% 22 1.50 Stock Y 8.0% 0.90 Market Index 10.0% 1.00 Risk-free rate 4.0% Using only the data shown in the preceding table (i) Calculate the alpha for Stock X? (ii) Calculate the alpha for Stock Y? (iii) State whether the two stocks are undervalued or overvalued? (iv) Assume that the risk-free rate increase to 7 percent and with the other data in the preceding matrix remaining unchanged calculate the alpha for Stock X? (v) is stock X undervalued or overvalued