(a) If stock A has a higher standard deviation of returns than stock B, which should have a higher expected return according to CAPM:

(i) Stock A

(ii) Stock B

(iii) 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?

(c) 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 expected excess return and standard deviation of returns.

Asset	Average excess return	Standard deviation of returns
Apple	44%	30%
Market	6%	18%

Does this violate the CAPM? Explain.