Which of the following are assumptions of the Capital Asset Pricing Model (CAPM)? Check all that apply. Asset quantities are given and fixed. Standard deviation is the same for all assets. Investors have homogeneous expectations. There are transaction costs. Consider the equation for the Capital Asset Pricing Model (CAPM): ri = rRF + (rM rRF) Cov(ri, rM)2M In this equation, the term (rMrRF)Cov(ri, rM)2M represents the . Suppose that the markets average excess return on stocks is 10.00% and that the risk-free rate is 3.00%. 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 (%) 0.30 0.50 1.00 5.00 Based on the CAPM and your calculations for the return to stocks, what does it mean when the coefficient bi < 1? The stock is more volatile than the market. The stocks return correlates with the stock market as a whole. The stock is less volatile than the market.