eBook Problem $7-06$ As an equity analyst, you have developed the following return forecasts and risk estimates for two different stock mutual funds $($Fund T and Fund U$)$: Forecasted ReturnCAPM BetaFund T$9\mathrm{.}0\%1\mathrm{.}40$Fund U$8\mathrm{.}00\mathrm{.}80$ Using only the data shown in the preceding table: If the risk$-$free rate is $4\mathrm{.}9$ percent and the expected market risk premium $($i$.$e$.,$ E$($RM$)$ RFR$)$ is $7\mathrm{.}5$ percent, calculate the expected return for each mutual fund according to the CAPM. Round your answers to two decimal places. Fund T:$\%$ Fund U:$\%$ Choose the correct SML graph. Note that labels with asterisk denote estimated returns. The correct graph is $-$Select$-$graph Agraph Bgraph Cgraph DItem $3.$ A$.$ B$.$ C$.$ D$.$ According to your analysis, are Funds T and U overvalued, undervalued, or properly valued? FundEvaluationT$-$Select$-$OvervaluedProperly valuedUndervaluedItem $4$U$-$Select$-$OvervaluedProperly valuedUndervaluedItem $5$