A stock has an expected return of 13 percent (according to the CAPM theory). When the risk-free rate is 7 percent and the imarket risk premiumiis 8 percent, what must the beta of this stock be? (Hint: Recall the deOnition of the market risk premium.)

(a) 0:60

(b) 0:75

(c) 1:20

(d) 1:50