You are considering investing in stock S and you want to know how stock S is related to the market portfolio M. Given your research, you discovered the following information: < Expected Return Standard Deviation Stock (S) < 15% 25% Market (M) 12% 20% Risk-free 2% Correlation of S and M 40% a) What is the exposure of stock S to market risk? (3 points) < b) Discuss whether according to the CAPM, stock S is overvalued, undervalued or fairly valued. (2 points) < c) What is the level of systematic and idiosyncratic risk for stock S? (5 points)