We have the following probability distribution of returns for Mahmood Co.: State of the Economy Probability Return Poor 0.25 -2.00% Average 0.40 14.00% Good 0.35 20.00% The risk-free rate, Vrt, is 4% and the required return on the market, rm, is 10%. Mahmood stock has a beta of 1.30. Mahmood Co's expected return is and its required return is a. 9.70%: 8.75% b. 10.40%: 10.15% c. 10.40%: 11,54% d. 12.10%: 11.80%