Stock A has a beta of 1.2 and an expected return of 17%. Stock B has a beta of 0.8 and an expected return of 13%. If the market is at equilibrium, what are the values for the risk-free rate and the Equity Premium, respectively? [HINT: look at the CAPM formulas]

a. 4% and 8%

b. 5% and 8%

c. 4% and 10%

d. 5% and 10%

e. None of the above