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You are considering five stocks as additions to your portfolio. You want to understand if they are priced correctly. With the following betas and expected

You are considering five stocks as additions to your portfolio. You want to understand if they are priced correctly. With the following betas and expected returns, and knowing the market risk premium is 8.8% and the risk-free rate is 3.7%, only one is correctly priced. Which one is it?

Stock Beta Expected Return
V 0.64 9.47%
W 0.97 12.03%
X 1.22 14.44%
Y 1.37 15.80
Z 1.68 18.37%

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