Suppose that the market can be described by the following three sources of systematic risk with associated risk premiums.

Factor	Risk Premium
Industrial production (I)	7	%
Interest rates (R)	4	%
Consumer confidence (C)	5	%

The return on a particular stock is generated according to the following equation:

r = 12% + 1.2I + 0.8R + 1.00C + e

a-1. Find the equilibrium rate of return on this stock using the APT. The T-bill rate is 8%. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

a-2. Is the stock over- or underpriced?