Which one of the following stocks is correctly priced if the risk-free rate of return is 3.4 percent and the market risk premium is 7.9 percent?

Stock	Beta			Expected Return
A		.85			8.50	%
B		1.50			15.25
C		1.31			11.25
D		1.23			11.77
E		.95			8.65

Multiple Choice

• Stock B

• Stock A

• Stock E

• Stock D

• Stock C