Ca) EXplam arry (b) The risk free rate is 8% and the expected market return is 16%. The expected returns for 4 securities are listed below together with their expected betas. Security Expected Return(%) 17.0 14.5 15.5 23.0 Expected Beta 1.5 0.8 1.3 1.7 Required: On the basis of these expectations, which securities are overvalued? Which are undervalued? (Show workings) (i) [8 marks] If the risk free rate were to rise to 12% and market return to 17%, which securities would be overvalued? Which would be undervalued? (Assume the expected returns and beta remains the same). (ii) [8 marks]