Here are data for two companies. The T$-$bill rate is $2\mathrm{.}25\%$ and market return is $10\mathrm{.}75\%.(8)$

Company ABC XYZ

Realized Return $12\%8\mathrm{.}5\%$

Beta $1\mathrm{.}10\mathrm{.}85$

$1)$ What would be the fair return for each company, according to the CAPM?

$2)$ Which company$($s$)$ is$($are$)$ underpriced and which company$($s$)$ is$($are$)$ overpriced? Why?