Assume the Risk-Free Rate of Return Is 6

Multiple Choice

Assume the risk-free rate of return is 6.5 percent and the market rate of return is 11.2 percent.Stock A with a beta of 0.88 and an expected return of 9.79 percent; Stock B with a beta of 1.26 and an expected return of 11.36 percent; Stock C with a beta of 1.47 and an expected return of 12.28 percent; Stock D with a beta of 0.79 and an expected return of 10.61 percent.Which one of the following stocks,if any,is correctly priced according to CAPM?

A) Stock A
B) Stock B
C) Stock C
D) Stock D
E) None of the stocks are correctly priced according to CAPM.