4. A risky security has a variance of.036190 and a covariance with the market of .0222. The variance of the market is 01975. What is the correlation of the risky security to the market? Home Interior's stock has an expected return of 13.2 percent and a beta of 1.28. The market return is 10.7 percent and the risk-free rate is 2.8 percent. What is the stock's estimated return using CAPM? Is this stock undervalued or overvalued? 5