The risk-free rate is 3.5 percent and the expected return on the market is 11 percent. Stock A has a beta of 1.1 and an expected return of 12 percent. Stock B has a beta of 0.92 and an expected return of 10.25 percent. Are these stocks correctly priced? Why or why not?

		No; Stock A is underpriced and stock B is overpriced.
		No; Stock A is underpriced but stock B is correctly priced.
		No; Stock A is overpriced and stock B is underpriced.
		No; Stock A is overpriced but stock B is correctly priced.
		Yes; Both stocks are correctly priced.