Problem 3: CAPM intuition check (4 points) a) If stock A has a higher standard deviation of returns than stock B, which should have a higher expected return according to the CAPM: Stock A. Stock B. Need further information (b) According to the CAPM, if you know the market risk premium, what is the only variable you need to know to determine the risk premium for asset A? Only variable you need to know: () Over the past 10 years, Apple stock and the market have had the following average annual excess returns and standard deviations. Asset Average excess return Standard deviation of returns Apple 44% 30% Market 6% 18% Does this violate the CAPM: Explain (d) For the next year, everyone agrees Apple stock and the market have the following ex- pected excess return and standard deviation of returns. Asset Expected excess return Standard deviation of return Apple 44% 30% Market 18% 6% Does this violate the CAPM: Explain