Questions 4-6 are based on the information that follows. RM 15% and CM =12%. The risk-free rate of return is 5%. A stock has a beta of 1.30 and is priced at $130.80. Everyone expects that by the end of one year the stock which pays no dividend will trade at $175.00 and these expectations are realized. You too believe in the accuracy of the forecast as well as in the validity of the SML relationship. 4. Please select the most accurate statement. This stock (a) is mispriced and its expected return lies on the SML (b) is mispriced, and its expected return therefore plots below the SML (c) has an expected return that plots above the SML and is an underpriced stock. (d) has an expected return that plots above the SML and is an overpriced stock. (e) is mispriced and its expected return lies parallel with the SML