1. A stock has an expected return of 12.4 percent, its beta is 1.17, and the risk-free rate is 4.2 percent. What must the expected return on the market be? (Round your answer to 2 decimal places. (e.g., 32.16))

Market expected return   %

2. Stock Y has a beta of 1.3 and an expected return of 15.3 percent. Stock Z has a beta of 0.70 and an expected return of 9.3 percent. If the risk-free rate is 5.5 percent and the market risk premium is 6.8 percent, the reward-to-risk ratios for stocks Y and Z are  and  percent, respectively. Since the SML reward-to-risk is percent, stock Y is (Click to select) over valued undervalued and Stock Z is (Click to select)over valued under valued. (Round your answers to 2 decimal places. (e.g., 32.16))