Assume that the risk-free rate is 4% and the expected return on the market portfolio is 10%. Stock A has a beta of 1.5 and an expected return of 12%. Stock B has a beta of 0.80 and an expected return of 9%. Are these stocks correctly priced? (choose only one alternative)

Group of answer choices

A. No, Stock A is underpriced and Stock B is correctly priced.

B. No, Stock A is underpriced and Stock B is overpriced..

C. No, Stock A is overpriced and Stock B is underpriced.

D. No, Stock A is overpriced and Stock B is correctly priced.

E. No, Stock A is correctly priced and Stock B is overpriced.