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 $1.)$

Stock Expected Return Standard Deviation Beta

A $7\mathrm{.}30\%16\%0\mathrm{.}8$

B $9\mathrm{.}05161\mathrm{.}3$

C $10\mathrm{.}45161\mathrm{.}7$

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.$)$

What is the market risk premium $($rM $-$ rRF$)?$ Round your answer to one decimal place.

$\%$

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

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

$\%$

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

Less than $16\%$

Greater than $16\%$

Equal to $16\%$

$-$Select$-$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 $(r_M-r_{RF})?$ 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 $16\%$

II$.$ Greater than $16\%$

III. Equal to $16\%$