SanDisk Corp. has a beta of 2.20. The U.S. Treasury rate is 3% and S&P 500 return is 11%. SanDisks stock has the expected return of 20.13%. Should you purchase this stock?

Yes, because the required rate of return on this is 18.92% and expected return is above the SML.

No, because the required rate of return on this is 18.92% and expected return is above the SML.

Yes, because the required rate of return on this is 27.20% and expected return is below the SML.

No, because the required rate of return on this is 20.60% and expected return is below the SML.