Stock A has a beta of 1.5 and an expected return of 10%. Stock B has a beta of 1.1 and an expected return of 8%. The current market price for stock A is $20 and the current market price for stock B is $30. The expected return for the market is 7.5%. (assume the risk free asset is a T- bill).

What is the risk free rate: A) 0.25% B) 1.25% C) 2.00% D) 2.50% E) None of the above