Suppose that the market$$s average excess return on stocks is $12\mathrm{.}00\%$ and that the risk$-$free rate is $2\mathrm{.}00\%.$ Complete the following table by computing expected returns to stocks for each beta coefficient using the Capital Asset Pricing Model $($CAPM$)$:

bi

Expected Return to Stocks $(\%)$

$0\mathrm{.}70-6\mathrm{.}40$

$0\mathrm{.}204\mathrm{.}40$

$1\mathrm{.}0014\mathrm{.}00$

$2\mathrm{.}0026\mathrm{.}00$

Based on the CAPM and your calculations for the return to stocks, what does it mean when the coefficient bi

$>1?$

The stock$$s return correlates with the stock market as a whole.

The stock is more volatile than the market.

The stock is less volatile than the market.