Exam Type 2 3. Jung Wu, CFA, uses the security market line to determine if stocks are undervalued or vervalued. Wu recently completed an analysis of Sang Tractor Supplies (STS) and derived the llowing forecasts for STS and for the broad market: Forecasted return for STS: 10% Standard deviation forecasted for STS: 15% Expected return on the stock market index: 12% Standard deviation on the stock market index: 20% R Correlation between STS and stock market index: 0.60 Risk-free rate: 6% hat would be the recommendation that Jung Wu have for the STS stock points)