You are analyzing a stock that has a beta of 1.5. The risk-free rate is 3% and you estimate the market risk premium to be 6%. If you expect the stock to have a return of 13% over the next year, should you buy it?

Group of answer choices

Yes. This is because you expect to earn a return higher than the fair return implied by CAPM.

Yes. This is because you expect to earn a return lower than the fair return implied by CAPM.

No. This is because you expect to earn a return higher than the fair return implied by CAPM.

No. This is because you expect to earn a return lower than the fair return implied by CAPM.