If the return on the market portfolio is $0\mathrm{.}12$ and the riskless rate is $0\mathrm{.}07$ and CAPM holds, the following stock are underpriced:

M&M: expected return$=0\mathrm{.}135$ Beta$=1\mathrm{.}2$

M: expected return$=0\mathrm{.}115$ Beta$=0\mathrm{.}8$