Every investor wants a fair return for a given amount of risk. For capital investments where the forecasted return is below the investor’s required return and above the capital market line, the investment is likely ________________.

Underpriced.

Here's the step-by-step explanation:

1. The Capital Market Line (CML) is a line that illustrates the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk (standard deviation) in the portfolio. It is used in the capital asset pricing model.

2. An investor's required return is the minimum amount of profit or gain they expect to receive on an investment. This return compensates the investor for the time value of money and the risk they are taking.

3. If the forecasted return of an investment is below the investor's required return, it means that the investment is not meeting the investor's expectations for profit.

4. However, if this same investment's return is above the CML, it means that the investment is providing a higher return than what would be expected given its level of risk.

5. Therefore, if an investment's forecasted return is below the investor's required return but above the CML, it suggests that the investment is underpriced. This is because it is providing a higher return for its level of risk than what the market typically provides, but it is not meeting the investor's personal required return.

6. In other words, the market is undervaluing the investment given its risk-return profile, making it a potentially good buy for investors who are willing to accept its level of risk.