The expected return on the market is $8\mathrm{.}5\%,$ and the risk$-$free rate of return is $2\mathrm{.}5\%.$

You use the CAPM to find the expected return on stocks.

Stock $x$ has a beta of $0\mathrm{.}8$

Stock $Y$ has a beta of $1\mathrm{.}2$

Which one statement is true?

A Stock $x$ has an expected return less than $9\%,$ and Stock $Y$ has an expected return greater than $9\%.$

Stock $x$ has an expected return greater than $9\%,$ and Stock $Y$ has an expected return less than $9\%.$

Stock $x$ and Stock $Y$ both have an expected return greater than $9\%.$

Stock $x$ and Stock $Y$ both have an expected return less than $9\%.$