Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc. The risk-free rate is 5 percent, the expected return on the market is 11.8 percent, and the betas of the two stocks are 1.2 and 0.7, respectively. Stevenss own forecasts of the returns on the two stocks are 16 percent for Furhman Labs and 11.00 percent for Garten.

1.	Calculate the required return for each stock. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Stock	Required return
Furhman Labs	%
Garten Testing	%

2.	Is each stock undervalued, fairly valued, or overvalued?
	Furhman Labs
	Undervalued Fair valued Overvalued
	Garten Testing
	Fair valued Overvalued Undervalued