T Corporation Has a Standard Deviation on Its Common Stock

Multiple Choice

T. Corporation has a standard deviation on its common stock of 75 percent and a correlation with market returns of 0.40. The market's standard deviation and expected return are 15 percent and 14 percent, respectively, and the risk-free rate of return is 8 percent. Calculate T. Corporation's required rate of return.

A) 1.867%
B) 9.867%
C) 19.20%
D) 14.06%