Suppose Company X has a beta of $1\mathrm{.}7$ and its stock returns have a standard deviation of $16\mathrm{.}00\%.$ If the risk free rate is $1\mathrm{.}20\%$ and the market risk premium is $4\mathrm{.}20\%,$ what should be the expected return on equity of this company according to the CAPM?

Group of answer choices

$8\mathrm{.}34\%$

$5\mathrm{.}40\%$

$5\mathrm{.}10\%$

$6\mathrm{.}30\%$