3. The following information describes the expected return and risk relationship for the stocks of two of WAH's competitors. Standard Deviation 0.2 Expected Return 12.0% 9.0 10.0 5.0 Stock X Stock Y Market Index Risk-free rate Beta 1.30 0.70 1.00 15 Using only the data shown in the preceding table: a. Draw and label a graph showing the security market line and position Stock X and Y relative to it b. Compute the alpha both for Stock X and for Stock Y c. Whether the two stocks are undervalued or overvalued? d. Assume that the risk-free rate increase to 7 percent with the other data in the preceding matrix remaining unchanged. Which stock is undervalued or overvalued? e. Under above situation and assuming you trusted your analyst to forecast estimate, what action should you take towards two stocks