16) Which one of the following stocks is correctly priced if the risk-free rate of return is 3.9 percent and the market risk premium is 8.4 percent? [A, B, C, D or E?]

Stock

Beta

Expected Return

A

0.77

7.86%

B

1.55

12.65%

C

1.36

17.33%

D

1.33

11.93%

E

0.95

11.88%