USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 7.4. If the expected return on the market is 11.5% and the risk-free rate of return is 4.5%, then what are the required rates of return for stocks X, Y, and Z based on the CAPM? X Y Z

A) 4.8% 18.3% 16.9%
B) 7.2% 20.7% 22.3%
C) 10.7% 17.5% 14.4%
D) 10.1% 12.2% 19.2%
E) 11.1% 12.2% 21.3%