Ruby, Inc. stock has a beta of 1.0326 and an expected return of 13%. The risk-free rate of return is 3.0% and the market rate of return is 12.2%. Which one of the following statements is true given this information?

a. The required return on Ruby stock, based on the Capital Asset Pricing Model, is 9.88%.

b. Ruby stock is overpriced.

c. Ruby stock has less systematic risk than the overall market.

d. Ruby stock is underpriced.

e. Ruby stock is correctly priced.