Under the Following Conditions, What Are the Expected Returns for Stocks

Multiple Choice

Under the following conditions, what are the expected returns for stocks Y and Z? $$\begin{array} { l l } \lambda ^ { 0 } = 0.04 & b _ { y , 1 } = 0.5 \\k _ { 1 } = 0.07 & b _ { y , 2 } = 1.3 \\k _ { 2 } = 0.05 & b _ { z , 1 } = 1.2 \\& b _ { z , 2 } = 0.9\end{array}$$

A) 12.0% and 13.3%
B) 13.5% and 14.2%
C) 13.9% and 15.6%
D) 14.0% and 16.9%
E) 15.8% and 17.3%