2) We run CAPM regressions with stock A, stock B and stock C. We also calculate some summary statistics (average returns and correlation with market) for each stocks returns. The results are given below, where intercept and Market-rf denote regression output and the final two columns are summary statistics from the data. intercept, Market - rf, Mean return, Correlation with market. Stock A: .3 .80 .1 .5 Stock B: .1 .95 .085 .65 Stock C:.07 .85 .12 .4 a) Which stock is the most sensitive to market excess returns? b) Which stock performs the best according to the CAPM? (Explain your answer) c) Assume the risk free rate is given by rf = 0.02 and market variance is 0.25. Calculate each stocks Sharpe Ratio? Which stock has the best risk-return relation according to Sharpe Ratios