Stock a Has a Beta of

Multiple Choice

Stock A has a beta of .68 and an expected return of 8.1 percent.Stock B has a beta of 1.42 and an expected return of 13.9 percent.Stock C has beta of 1.23 and an expected return of 12.4 percent.Stock D has a beta of 1.31 and an expected return of 12.6 percent.Stock E has a beta of .94 and an expected return of 9.8 percent.Which one of these stocks is the most accurately priced if the risk-free rate of return is 2.5 percent and the market risk premium is 8 percent?

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