Checked!CAPM Returns Covariance of Stock Returns and Stock Market Returns Variance of Stock Market Returns Rate of Return on Treasury Bond Risk Premium 62.2% 43.0% 3.9% 4.5% Please compute the stock's expected return, using the CAPM Now, suppose the covariance is this: 955% Please compute the new expected return, usisng the CAPM. Insight: stock's that "covary" with the market more than before offer less diversification-and so are riskier. In turn, this increases their expected (or required) return. How much as the stock's expected return increased? A Between 0.2% and 1.0% B Between 1 .0% and 2.0% C Between 2.0% and 3.0% D Between 3.0% and 4.5%