Consider the following stocks, , all of which will pay a liquidating dividend one year from now and nothing in the interim. Assume the risk-free rate is 2% and the market risk premium is 8% a. What does the CAPM predict the expected return for each stock should be? d. What is the sign of the correlation between the residuals you calculated in part (c) and market capitalization? e. What can you conclude from your answers to part (b) of the previous problem and part (d) of this problem abo betas and market capitalizations randomly.) a. What does the CAPM predict the expected return for each stock should be? According to CAPM, the expected return for stock A is 8.24%. (Round to two decimal places.) According to CAPM, the expected return for stock B is 13.28 \%. (Round to two decimal places.) According to CAPM, the expected return for stock C is 12.56 \%. (Round to two decimal places.) According to CAPM, the expected return of stock D is 11.52%. (Round to two decimal places.) The slope coefficient of this regression is . (Round to six decimal places.) The intercept of this regression is %. (Round to four decimal places.) For each stock compute the difference between the actual expected return and the best fitting line given by the intercept and slope coefficient in (b). (Round to four decimal places.) d. What is the sign of correlation between the residuals you calculated in part (c) and market capitalization? The correlation between the residuals you calculated in part (c) and market capitalization is . (Round to six decimal places.) betas and market capitalizations randomly.) (Select the best choice below.) A. You cannot tell definitively. B. They would not change at all. C. The numbers would remain the same, but the signs might change. D. The numbers would change, but their signs would remain the same