As an equity analyst, you have developed the following return forecasts and risk estimates for two different stock mutual funds (Fund T and Fund U):

Fund T - 11% Forecasted Return - 1.3 CAPM Beta

Fund U - 13% Forecasted Return - 0.9 CAPM Beta

Using only the data shown

If the risk-free rate is 3.8 percent and the expected market risk premium (i.e.,E(RM) RFR) is 6.6 percent, calculate the expected return for each mutual fund according to the CAPM.

Round your answers to two decimal places.

Fund T: _____

Fund U: ______

According to your analysis, are Funds T and U overvalued, undervalued, or properly valued?

T -

U -