Final answer:
The information provided is insufficient to calculate the risk-free rate of return using the Capital Asset Pricing Model (CAPM) since the market return is not provided in the question. Typically, the risk-free rate is a known value used to calculate the expected stock return, not something derived from it.
Step-by-step explanation:
The question asks for the risk-free rate of return given a stock with a beta of 1.30 and an expected return of 15.3%. To solve this, we can use the Capital Asset Pricing Model (CAPM) which describes the relationship between systematic risk and expected return for assets (typically stocks). The CAPM is calculated with the formula:
Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)
However, because we don't have the market return, we cannot use this formula directly to find the risk-free rate. The problem as stated does not provide enough information to accurately solve for the risk-free rate, and hence, we can't provide an answer from the options given. More commonly, the risk-free rate is a given value used to calculate the expected return of the stock using CAPM, not the other way around.