8.

Suppose the risk-free return is 3%; The market portfolio has an expected return of 8% and a volatility of 10%.

Merck & Co. (Ticker: MRK) stock has a 12% volatility and a correlation with the market of 0.19.

Under the CAPM assumptions, what is its expected return?

Group of answer choices

3.56%

6.78%

5.61%

4.14%