The T-bill rate is 1% and the market risk premium is 6%

The forecasted returns are for GS: 9.28% for C: 16.54% and for JPM: 8.98%.

1. Which stocks are overvalued and which are undervalued?

Please explain how you determine which stocks are overvalued and which stocks are undervalued.

\begin{tabular}{|l|c|c|c|} \hline \multicolumn{1}{|c|}{ Stock } & Forecasted Return & Beta & Fair Return \\ \hline GS & 9.5% & 1.38 & ? \\ \hline C & 18% & 2.59 & ? \\ \hline JPM & 8.0% & 1.33 & ? \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|} \hline \multicolumn{1}{|c|}{ Stock } & Forecasted Return & Beta & Fair Return \\ \hline GS & 9.5% & 1.38 & ? \\ \hline C & 18% & 2.59 & ? \\ \hline JPM & 8.0% & 1.33 & ? \\ \hline \end{tabular}