Stock A has a level of systematic risk, Beta_A = 1.5, and statistics show that the expected return on the market portfolio is 12% and the risk-free rate is 4%. If Stock A has a disequilibrium rate of return equal to 12%, you would

*The equlibrium rate of return is 16%.

a.) conclude that it is over-priced

b.) conclude that it is under-priced

c.) expect stock A to be sold in the market to restore equilibrium

d.) both a and c

e.) not enough information to tell