Stock X has a beta of 1.3. A day trader is watching the stock and based on the currently observed price believes he can expect a 13.4% rate of return. The market risk premium is 8.2% and the risk-free rate is 2.4%. Is Stock X correctly priced? Explain you answer and show your work. (Hint: Use the CAPM equation to calculate the CAPM expected return and compare to the observed expected return. Draw a diagram of risk and return showing the Security Market Line and Stock X