Consider the following information for three stocks, 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 $1.)$

$\backslash$table$[[$Stock$,$Expected Return,Standard Deviation,Beta$],[$A$,8\mathrm{.}92\%,16\%,0\mathrm{.}8],[$B$,10\mathrm{.}39,16,1\mathrm{.}1],[$C$,12\mathrm{.}84,16,1\mathrm{.}6]]$

Fund $P$ has one$-$third of its funds invested in each of the three stocks. The risk$-$free rate is $5\%,$ and the market is in equilibrium. $($That is$,$ required returns equal expected returns.$)$ The data has been collected in the Microsoft Excel Online file below. Operf the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

a$.$ What is the market risk premium $(r_M-r_{RF})?$ Round your answer to two decimal places.

$\%$

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$.$ Would you expect the standard deviation of Fund $P$ to be less than $16\%,$ equal to $16\%,$ or greater than $16\%?$

I. less than $16\%$

II$.$ greater than $16\%$

III. equal to $16\%$