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Company Glasses Co. Contact Inc. E(r) 14% 13% Std Dev 17% 19% Beta 1.7 1 Here are data on two companies. The T-bill rate is

Company	Glasses Co.	Contact Inc.
E(r)	14%	13%
Std Dev	17%	19%
Beta	1.7	1

Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 7.4%.

What would be the fair return for each company, according to CAPM? Are they over, under, or fairly priced? What is each firms alpha, and which is the best buy?

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