Wilson is now evaluating the expected performance of two common stocks, Furhman Labs Inc. and Garten Testing Inc. He has gathered the following information:

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The risk$-$free rate is $5\%.$

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The expected return on the market portfolio is $11\mathrm{.}5\%.$

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The beta of Garten stock is $1\mathrm{.}5.$

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The beta of Furhman stock is $\mathrm{.}8.$

Based on his own analysis, Wilson's forecasts of the returns on the two stocks are $13\mathrm{.}25\%$ for Garten stock and $11\mathrm{.}25\%$ for Furhman stock. Based on your calculations $($required rate of return for Garten Testing stock and for Fuhrman Labs stock$),$ indicate whether each stock is undervalued, fairly valued, or overvalued.

Group of answer choices

Furhman Labs is overvalued; Garten Testing is overvalued

Furhman Labs is undervalued; Garten Testing is undervalued

Furhman Labs is overvalued; Garten Testing is undervalued

Furhman Labs is undervalued; Garten Testing is overvalued