$150$

Reward$-$to$-$Risk Ratios $[$ LO$4]$ Stock Y has a beta of $1\mathrm{.}2$ and an expected return of $11\mathrm{.}5$ percent. Stock $Z$ has a beta of $\mathrm{.}80$ and an expected return of $8\mathrm{.}5$ percent. If the risk$-$free rate is $3\mathrm{.}2$ percent and the market risk premium is $6\mathrm{.}8$ percent, are these stocks correctly priced? Show work!