Question $21$

$4$ pts

The expected return of Stock A and Stock B are $8\%$ and $14\%$ respectively.

Beta of Stock A and Stock B are $0\mathrm{.}8$ and $1\mathrm{.}6$ respectively.

Suppose the CAPM holds.

Find the risk$-$free rate.

$7\mathrm{.}5\%$

$9\mathrm{.}5\%$

$2\%$

$11\%$