Which one of the following stocks is over-priced if the risk-free rate of return is 3.0 percent and the market risk premium is 7.5 percent?

Stock	Beta			Expected Return
A		.66			8.46	%
B		1.12			12.47
C		1.27			11.19
D		1.44			13.80
E		1.45			15

Hint: Being over-priced means the stock's expected return is lower than what it should be, while being under-priced means the stock's expected return is too high.

Stock D

Stock A

Stock C

Stock E

Stock B