Your neighbor is a security analyst. He has conducted his research about some stocks in New York Stock Exchange (NYSE) and his findings are as follows:

Stock A will have a return of 18%, stock B will have a return of 20 % and stock C will have a return of 22%, but his findings do not involve the CAPM (Capital Asset Pricing Model).

You are a business graduate and when you have used CAPM, you have come to know that: Stock A’s expected return is 15.50%, Stock B’s expected return is 24.63% and Stock C’s expected return is 25.39%.

In your opinion, whether the NYSE has over-priced or under-priced each stock and in the light of these results, which of these stocks are suitable for investment?