Use the Capital Asset Pricing Model to determine what your required rate of return should be for Nike (NKE) with a reported Beta of 1.26.

Note: the 10 year Treasury bond yield is 2.71% (proxy for nominal risk-free rate) and the average return on the market, as measured by the S&P500 is 12.11%.

Select one:

a. 14.55%

b. 9.01%

c. 13.43%

d. 10.72%

e. 7.42%