Thayer Farms stock has a beta of 1.12. The risk-free rate of return is 4.34 percent and the market risk premium is 7.92 percent. What is the expected rate of return on this stock? 

(a)  

The common stock of Alpha Manufacturers has a beta of 1.47 and an actual expected return of 15.26 percent. The risk-free rate of return is 4.3 percent and the market rate of return is 12.01 percent. Should you buy or sell the stock?

(a)  

Which one of the following stocks is correctly priced if the risk-free rate of return is 3.7 percent and the market risk premium is 8.8 percent?

Stock A: Beta = 0.64; expected return = 9.47%

Stock B: Beta = 0.97; expected return = 12.03%

Stock C: Beta = 1.22; expected return = 14.44%

(a)