Consider the following information for stocks $A,B,$ and $C.$ The returns on the three stocks are positively

correlated, but they are not perfectly correlated. $($That is$,$ each of the correlation coefficients is between $0$

and $1.)$

Fund $P$ has one$-$third of its funds invested in each of the three stocks. The risk$-$free rate is $4\mathrm{.}5\%,$ and the

market is in equilibrium. $($That is$,$ required returns equal expected returns.$)$

a$.$ What is the market risk premium $(rM-r_{RF})?$ Round your answer to one decimal place.

b$.$ What is the beta of Fund P$?$ Do not round intermediate calculations. Round your answer to two decimal

places.

c$.$ What is the required return of Fund P$?$ Do not round intermediate calculations. Round your answer to

two decimal places.

$\%$

d$.$ What would you expect the standard deviation of Fund $P$ to be$?$

I. Less than $16\%$