Recession 0.20 +0.14 0.11 Normal 0.55 0.14 0.15 Irrational Exuberante 0.25 0.32 0.30 Calculate the expected return on each stock. [6 marks] ii. Assuming the capital asset pricing model holds, and Stock B's beta is greater than Stock A's beta by 0.25, what is the expected market risk premium? [7 marks] b. Discuss the statement "the Capital Asset Pricing Model (CAPM) is just an academic exercise and does not reflect the actual market scenarios