Distribution of estimated rate of return on the Majeto Growth Fund: State of the economy Estimated return Probability Strong $1.7594 10 Normal 15.00% 13 Weak 21.7594 13 The standard deviation is: Answer PRATIBA-RO). & lis . & (c(on)- 2. The risk-free asset is a T-bill money market fund offering a risk-free rate of 7% per year. The stock index fund's expected return is 15% and standard deviation is 30%. What is the reward-to-risk (slope) ratio? Answer: 3. You are choosing a portfolio from a stock index fund and risk-free asset. The risk-free rate is 6%, expected return on the stock index fund is 14%, and its standard deviation is 20%. If you choose a portfolio with an expected return of 10.8%, what is its standard deviation? Answer: A company has $10 million of debt outstanding at book value. The debt is trading in the mari 90% of book value. The yield to maturity at current market prices is 12 percent. The 1 millio are selling at $20 per share. The cost of equity is 19 percent, and the tax rate is 34%. The we average cost of capital of the company is