risk-free rate is 3%. Problem 2 The risk-free rate is 1% and the market risk premium is 6%. Below table shows the return characteristics of three stocks A, B, and C: Stock Forecasted return (FR) B. 3.80% 1.3 10.60% 6.40% 0.9 a. [3pts According to the CAPM, what would be the fair return for each stock? b. [3pts Characterize each stock as underpriced, overpriced, or properly priced