ASSUME THAT THE RISK-FREE RATE OF RETURN IS 4%, AND THE EXPECTED RETURN ON THE MARKET PORTFOLIO IS 10%. IF THE SYSTEMATIC RISK INHERENT IN THE STOCK OF ABC CORPORATION IS 1.80, USING THE CAPITAL ASSET PRICING MODEL (CAPM) CALCULATE THE EXPECTED RETURN OF ABC. (DO NOT ROUND INTERMEDIATE CALCULATIONS AND ROUND YOUR PERCENTAGE ANSWER TO 1 DECIMAL PLACE.)

Select one:

a. 14.0%

b. 14.8%

c. 16%

d. 16.8%

e. NONE OF THESE CHOICES