The risk free rate of return is 3.4%; the expected return of the market portfolio is 12.2% and the beta of Stock A is 1.36. An analyst has estimated that the expected return of Stock A is 14.87%. According to the Capital Asset Pricing Model, Stock is ___________________________.

Underpriced because its expected return should be 15.37 percent according to the CAPM

Overpriced because its expected return should be 15.37 percent according to the CAPM

Overpriced because its expected return should be 19.99 percent according to the CAPM

Underpriced because its expected return should be 19.99 percent according to the CAPM