USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
You expect the risk-free rate (RFR) to be 4 percent and the market return to be 10 percent. You also have the following information about three stocks.

-Refer to Exhibit 7.7. What are the estimated rates of return for the three stocks (in the order A, B, C) ?

A) 13.0 percent, 10.6 percent, 8.8 percent
B) 15.0 percent, 11.1 percent, 2.9 percent
C) 18.7 percent, 11.1 percent, 8.8 percent
D) 21.7 percent, 10.0 percent, 6.9 percent
E) 25.0 percent, 11.1 percent, 7.1 percent