a) Based on the following information, determine whether the securities are undervalued, overvalued or fairly valued by employing the Capital Asset Pricing Model (CAPM). b) Expected Return Correlation with (%) Market Portfolio Standard Deviation (%) Security 1 14.5 0.8 19 Security 2 8.2 0.7 8 Security 3 11.0 0.5 14 Security 4 4.0 0.1 8 Market portfolio 11.0 1.0 11 Risk-free rate 4.0 (16 marks) The recent global financial crisis has exposed the weaknesses of international investments. Discuss any two (2) potential risks of international diversification. (4 marks)