Asset	E(R)	Std. deviation
A	17%	50%
Market (M)	10%	20%

Above is the expected return and standard deviation of a stock A and the market portfolio. The correlation coefficient between A and the market portfolio (M) is 0.5. The risk-free rate is 4%

Based on CAPM, stock A is ____________ because it offers an alpha of ____________.

	A.	underpriced; 7%
	B.	underpriced; 5.5%
	C.	overpriced; 5.5%
	D.	underpriced; 0.5%
	E.	overpriced; -0.5%