Excel Online Structured Activity: CAPM, portfolio risk, and return

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 $1.)$

Stock Expected Return Standard Deviation Beta

A $9\mathrm{.}18\%16\%0\mathrm{.}8$

B $11\mathrm{.}02161\mathrm{.}2$

C $12\mathrm{.}86161\mathrm{.}6$

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.$)$ The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

$1.$ What is the market risk premium $($rM $-$ rRF$)?$ Round your answer to two decimal places.

$2.$ What is the beta of Fund P$?$ Do not round intermediate calculations. Round your answer to two decimal places.

$3.$ What is the required return of Fund P$?$ Do not round intermediate calculations. Round your answer to two decimal places.

$4.$ Would you expect the standard deviation of Fund P to be less than $16\%,$ equal to $16\%,$ or greater than $16\%?$

a$.$ less than $16\%$

b$.$ greater than $16\%$

c$.$ equal to $16\%$