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The risk-free rate is 5% and the market risk premium is 10%. A stock with a beta of 2.0 is currently priced so that it

The risk-free rate is 5% and the market risk premium is 10%. A stock with a beta of 2.0 is currently priced so that it is expected to earn 15% next year. According to CAPM, what can you say about the stock?

Group of answer choices

The stock is undervalued.

The stock is as risky as the market portfolio.

The stock is fairly priced.

The stock is overvalued.

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