You have been provided the following data about the securities of three firms, the market portfolio, and the risk-free asset.

Security	Expected Return	Std. Deviation	Correlation with the Market	Beta
Firm A	.10	.31	?	.85
Firm B	.14	?	.50	1.40
Firm C	.16	.65	.35	?
The Market Portfolio	.12	.20	?	?
The Risk- Free Asset	.05	?	?	?

1. Using the Capital Asset Pricing Model (CAPM), fill in the missing values.
2. Draw the Security Market line (SML) and plot all the securities listed above.
3. Are the stocks A, B, and C correctly priced according to the CAPM? Please explain.

If these securities are not correctly priced, what is your recommendation to an investor who holds a well-diversified portfolio? Please explain.