Which One of the Following Stocks Is Correctly Priced If

Multiple Choice

Which one of the following stocks is correctly priced if the risk-free rate of return is 3.6% and the market rate of return is 10.5%? $$\begin{array} { c r c } \underline{\text { Stock }} & \underline{ \text { Beta }} & \underline{\text { Expected Return }} \\\text { A } & .85 & 9.2 \% \\\text { B } & 1.08 & 11.8 \% \\\text { C } & 1.69 & 15.3 \% \\\text { D } & .71 & 7.8 \% \\\text { E } & 1.45 & 12.3 \%\end{array}$$

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