The Risk-Free Rate Is 5%, the Market Risk Premium Is

Multiple Choice

The risk-free rate is 5%, the market risk premium is 8%, and the market return is 13%. Stock Y's beta is 1.85 and the standard deviation of its returns is 62.5%. What should be the stock's expected rate of return to make the investor indifferent toward buying or selling the stock?

A) 11.66%
B) 12.82%
C) 15.54%
D) 12.50%
E) 19.80%