Assume that you obtained information about the ABC company including the following issues:

• Actual share price    $14
• Estimated share price after one year     $15
• the estimated company's beta     1.1
• Normally similar investors use S&P 500 as a benchmark.
• The estimated annual return on the S&P500      10%
• The yielding rate for the 90-days T-bill over the last 10 years   3%

As an investor, you should

1.Purchase this stock because it is overvalued

2.Purchased this stock because it is undervalued

3.Not purchase this stock because it is undervalued

4.Not purchase this stock because it is overvalued