The information below has been obtained for several financial assets.
Asset Expected Return (ER) Beta (risk)
T-Bill 10% 0.0
Alar's Stock 12% 0.4
Bolo's Stock 13.8% 0.6
Cala's Stock 15.5% 1.0
Domo's Stock 17.3% 1.4
Given the above information:
1) Graph the Security Market Line(SML)using the coordinates B(beta)=1; E(Rm)=15%.
2) Based on part(a), which assets are over or under priced?