In a given year, T-bills return 3.8% and the market is expected to return 13.5%. The stock return that is realized for a firm with a beta of 1.32 is 15.0% in this year. According to CAPM, which one of these statements is correct given this information?

• The stock is currently overpriced.

• The stock plots above the security market line.

• The risk premium on the stock is too high given the stock's beta.

• The stock plots to the left of the market on a security market line graph