The stock of Derek and the Dominos is expected to earn a return of $12\mathrm{.}1\%$ next year. You know that the risk$-$free rate is $3\mathrm{.}2$ percent, the market return is $12\mathrm{.}1$ percent, and that the beta of Derek and the Dominos stock is $1\mathrm{.}17?$ Given this information, which of the following is true?

Multiple Choice

The stock is undervalued.

We need the required rate of return on the stock.

The stock is overvalued.

The stock is fairly valued.