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$)8\%$

Interest rates $($R$)3$

Consumer confidence $($C$)5$

Required:

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

r $=14\%+1\mathrm{.}3$I $+0\mathrm{.}7$R $+1\mathrm{.}00$C $+$ e

a$-1.$ Find the equilibrium rate of return on this stock using the APT. The T$-$bill rate is $9\%.$

Note: Do not round intermediate calculations. Round your answer to $1$ decimal place.

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