Exercise #3: Assume the risk-free rate of 3% and a 10% expected market return. The following table shows betas for three companies. Calculate each stock's expected rate of return using CAPM. Based on your fundamental analysis, you expect Apple to return 17%, Alcoa to return 12%, and Walmart to return 6.6%. Indicate whether the stock is over or underpriced? Company Beta Exp Return Over-/Under-priced Apple 1.38 Alcoa 1.10 Wal-mart 0.45