A stock has an expected trturn based on the market price of 20.8%. The beta of the stock is 2.2, the risk free rate is 4% and the expected return on the market is 17%. Is the stock over, under or cortectly valued?

a. overvalued since the stocks equilibrium return is greater than its expected return

b. none of the listed items is correct

c. undervalued since the stocks equilibrium return is greater than its expected return

d. undervalued since the stocks equilibrium return is less than its expected return

e. overvalued since the stocks equilibrium return is less than its expected return