According to CAPM, which one of the following stocks is correctly priced if the risk-free rate of return is 3.6% and the market rate of return is 10.5%?

Stock Beta Expected Realized Return

A .85 9.2%

B 1.08 11.8%

C 1.69 15.3%

D .71 7.8%

E 1.45 12.3%