The Risk-Free Rate of Return Is 2

Multiple Choice

The risk-free rate of return is 2.7 percent, the inflation rate is 3.1 percent, and the market risk premium is 6.9 percent. What is the expected rate of return on a stock with a beta of 1.08?

A) 10.92 percent
B) 10.15 percent
C) 12.22 percent
D) 11.47 percent
E) 11.79 percent