Error in Reading 51 Question 8? Error, annual, problem, percent, properly

kseniaru

In my CFA book, I’ve been looking at this mindnumbingly easy problem and I’m going nuts. They give you 4 stocks
A B C D with betas of .9 1.0 1.1 and 1.2 respectively
RF is 4 percent
Market Risk Premium is 8 percent
It says they all have an estimated annual of 12.8 percent. How many are under/ over valued
CAPM tells us
11.2
12
12.8
and 13.6 for the stocks
however the book says 2 are undervalued????? Wouldn’t A and B be OVER valued C properly valued and D undervalued or do I sucK?