a. Stock XYZ has an expected return of 12% and = 1. Stock ABC is expected to return 13% with a beta of 1.5. The markets expected return is 11% and rf = 5%. According to the CAPM, which stock is a better buy? What is the alpha of each stock? Plot the SML and the two stocks. Show the alphas of each on the graph. *Please make sure to draw SML graph.