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 $5\mathrm{.}5\%,$ and the market is in equilibrium. $($That is$,$ required returns equal

expected returns.$)$

a$.$ What is the market risk premium $(r_M-$ rRF$)?$ 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 retum 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 $16\%$

II$.$ Greater than $16\%$

III. Equal to $16\%$