Stock Y Has a Beta of

Multiple Choice

Stock Y has a beta of .79 and an expected return of 7.93%. Stock Z has a beta of 1.31 and an expected return of 12.3%. What is the risk-free rate of return assuming that both Stock X and Stock Y are correctly priced?

A) 1.20%
B) 1.29%
C) 1.43%
D) 2.83%
E) 3.30%