Final answer:
Unsystematic risk relates to risks specific to an individual company or industry and is not represented by the position on the Capital Allocation Line. The CAL involves the combination of risky and risk-free assets. The concepts of valuation do not typically intersect with the graphical representation of the CAL.
Step-by-step explanation:
Unsystematic risk refers to the specific risks related to an individual company or industry. It is not represented on either the left or right of the Capital Allocation Line (CAL). Instead, the CAL represents different combinations of risky and risk-free assets in an investment portfolio.
The options given in the question appear to conflate concepts from different areas of finance. When assessing whether an asset is under or overvalued, analysts might look at the asset's expected return relative to its intrinsic value, not its placement regarding the CAL or systematic risk.