Based on five years of monthly data, you derive the following information for the companies listed:

Based on five years of monthly data, you derive the following information for the companies listed:

Company	ªi (intercept)	σi	rϊm
Intel	.22	12.10%	.72
Ford	.10	14.60	.33
Anheuser Busch	.17	7.60	.55
Merck	.05	10.20	.60
S&P 500	.00	5.50	1.00

1. Compute the data coefficient for each stock
2. Assuming a risk free rate of 8 percent and an expected return for the market portfolio of 15 percent, computer the expected (required) return for all the stocks and plot them on the SML.
3. Plot the following estimated returns for the next year on the SML and indicate which stocks are undervalued or overvalued.

                                                              i.      Intel-20 percent

                                                            ii.      Ford-15 percent

                                                          iii.      Anheuser Busch -19 percent

                                                          iv.      Merck -10 percent

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