You have determined that Stock A has a beta of +1.56, and the market is expected to decline 10% over the next year. Using security market line (SML) analysis, calculate the percentage you expect the return of Stock A to rise or fall over the next year.

A)

Fall by 15.6%

B)

Rise by 1.56%

C)

Rise by 156%

D)

Fall by 1.56%