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Consider the folla wing information for three stocks, Stocks X, Y, and Z. The returns on the three s: are positively correlated, but they are

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Consider the folla wing information for three stocks, Stocks X, Y, and Z. The returns on the three s: are positively correlated, but they are not pericetly correlated. (That is. each of the correlation coefficients is between 0 and 1.) Fund Q has one-third of its funds invested in each of the three stocks. The riskfree rate is 5.5%, and the market is in equilibrium. (That is, required returns equal expected returns.) a. What is the market risk premium (fMrRF)) ? b. What is the ta of Fund Q ? c. What is the required return of Fund Q? d. Would you expect the standard deviation of Fund Q to be less than 15%, equal to 15%, or greater than 15% ? Explain

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