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Which one of the following stocks is correctly priced if the risk-free rate of return is 4 percent and the market risk premium is 6.5
Which one of the following stocks is correctly priced if the risk-free rate of return is 4 percent and the market risk premium is 6.5 percent?
Stock | Beta | Expected Return |
A | 0.68 | 8.42% |
B | 1.42 | 13.9% |
C | 1.23 | 11.8% |
D | 1.31 | 12.6% |
E | 0.94 | 9.7% |
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