Question $1$

Please refer to the following screenshot for Bank of America from Yahoo Finance:

NYSE $-$ Nasdaq Real Time Price $\backslash (\backslash$cdot $\backslash )$ USD

Bank of America Corporation $($BAC$)$

$\backslash (39\mathrm{.}10-0\mathrm{.}35(-0\mathrm{.}87\backslash \%)\backslash )$

As of $11$:$57$ AM EDT. Market Open.

Market Cap $($intraday$)$

$303\mathrm{.}4$ B

Earnings Date

Oct $15,2024$

Beta $(5$Y Monthly$)$

$1\mathrm{.}34$

Forward Dividend $\backslash$& Yield

$1\mathrm{.}04(2\mathrm{.}64\backslash \%)$

PE Ratio $($TTM$)$

$13\mathrm{.}72$ Ex$-$Dividend Date

Sep $6,2024$

EPS$($TTM$)$

$2\mathrm{.}85$

$1$y Target Est

$45\mathrm{.}82$

Suppose the Treasury bond yield is $\backslash (5\backslash \%\backslash )$ and the return on the S$\backslash$&P $500$ is $\backslash (12\backslash \%\backslash ).$ Bank of America's beta is provided in the attached screenshot from Yahoo Finance. The beta is estimated using $5$ years of monthly returns. If the CAPM holds, what should be the required rate of return on Bank of America's stock?

$\backslash (12\mathrm{.}25\backslash \%\backslash )$

$14\mathrm{.}38\backslash \%$

$8\mathrm{.}12\backslash \%$

$8\mathrm{.}57\backslash \%$

$12\mathrm{.}92\backslash \%$