The ABC Co is considering two projects A and B. Both

projects have conventional cash flows.

Project A has a beta of 0.9 and it has the expected return of 12.1%.

Project B has beta of 1.1 and it has expected return of 10.8%.

Required return of the market is 11.5%. The risk-free rate is positive

and less then required market return.

Are these two projects correctly priced relative to each other?

A. Yes

B. No

C. Cannot be determined without knowing the risk free rate