Cyclical Company is projected to have a return of $32\%$ if the economy is very strong, while it is expected to have a return of $4\%$ if the economy is weak. Counter Company is expected to have a return of $2\%$ if the economy is very strong, while it is expected to have a return of $10\%$ if the economy is very weak. The S&P $500$ Index is expected to have a return of $13\%$ in a very strong economy, while it is projected to have a return of $-3\%$ in a weak economy.

Assume each scenario is equally likely. If the current T$-$Bill yield is $1\mathrm{.}20\%$ and the historic Market Risk Premium is $7\mathrm{.}00\%,$ what does CAPM predict for the expected return of Cyclical Company?

Multiple Choice

$13\mathrm{.}45\%$

$15\mathrm{.}34\%$

$14\mathrm{.}35\%$

$14\mathrm{.}45\%$

None of the answers here are correct.