Company A's historical returns for the past three years were 6 percent, 15 percent, and 15 percent. Similarly, the market portfolio's returns were 10 percent, 10 percent, and 16 percent. According to the security market line (SML), Stock A was

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The Security Market Line (SML) is a graphical representation of the Capital Asset Pricing Model (CAPM), which describes the relationship between the expected return of an investment and its risk as measured by beta. To determine if Stock A was overpriced, underpriced, or correctly priced according to the SML, we need information about the risk-free rate and the beta of Stock A relative to the market portfolio. Without this information, we cannot accurately assess the stock's pricing relative to the SML.

Company A's Historical Returns for the Past Three Years Were