The Risk-Free Rate Is 5% and the Expected Return on a Stock

The risk-free rate is 5% and the expected return on a stock is 12%. A derivative can be valued by: choose one)

A) Assuming that the expected growth rate for the stock price is 13% and discounting the expected payoff at 12%
B) Assuming that the expected growth rate for the stock price is 5% and discounting the expected payoff at 12%
C) Assuming that the expected growth rate for the stock price is 5% and discounting the expected payoff at 5%
D) Assuming that the expected growth rate for the stock price is 13% and discounting the expected payoff at 5%