The stock of Incyte Corporation is expected to return 28% annually, and the stock of Teva Pharmaceutical Industries Ltd. is expected to return 16% annually. The beta of the Incyte stock is 1.80, and the beta of the Teva Pharmaceutical stock is 2.75 . The risk-free rate of return is expected to be 2%, but the return on the market portfolio is 18%.

Based on the Security Market Line (SML), what are the required rates of return for Incyte and Teva Pharmaceutical given the current market situation?

Question 24 options:

	The required rate of return for Incyte is 28.80%, and that for Teva Pharmaceutical is 44.00%.
	The required rate of return for Incyte is 30.80%, and that for Teva Pharmaceutical is 46.00%.
	The required rate of return for Incyte is 34.40%, and that for Teva Pharmaceutical is 51.50%.
	The required rate of return for Incyte is 32.40%, and that for Teva Pharmaceutical is 49.50%.