The risk-free rate is 6% and the expected return on a stock is 12%. A derivative on the stock can be valued by

A. assuming that the expected growth rate for the stock price is 6% and discounting the expected payoff of the derivative at 6%.

B. assuming that the expected growth rate for the stock price is 12% and discounting the expected payoff of the derivative at 12%.

C. assuming that the expected growth rate for the stock price is 12% and discounting the expected payoff of the derivative at 6%.

D. assuming that the expected growth rate for the stock price is 6% and discounting the expected payoff of the derivative at 12%.