Problem: Which one of the following stocks is correctly priced if the risk-free rate of return is 3.2 percent and the market rate of return is 11.76 percent?
Stock Beta Expected Return
A 0.87 11.03%
B 1.09 12.50%
C 1.18 13.21%
D 1.34 15.02%
E 1.62 17.07%