Which One of the Following Stocks Is Correctly Priced According

Multiple Choice

Which one of the following stocks is correctly priced according to CAPM if the risk-free rate of return is 3.4 percent and the market risk premium is 7.4 percent? $\begin{array}{ccc}&& \text { Expected } \\\text { Stock } & \text { Beta } & \text { Retumn } \\\mathrm{A} & .87 & .096 \\\mathrm{~B} & 1.09 & .102 \\\mathrm{C} & 1.62 & .146 \\\mathrm{D} & .98 & .107 \\\mathrm{~F} & 1.16 &. 139\end{array}$

A) A
B) B
C) C
D) D
E) E