Which of the following stocks is under priced if the risk-free rate of return is 3.7 percent and the market risk-premium is 8.8 percent?

Stock Beta Forecast Return

A 0.64 9.47%

B 0.97 12.03%

C 1.22 14.44%

D 1.47 15.80%

E 1.78 18.37%

Group of answer choices

1. B and D

2. C

3. B, D, and E

4. B, C, and D

5. A