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 $1.)$

$\backslash$table$[[$Stock$,$Expected Return,Standard Deviation,Beta$],[$A$,8\mathrm{.}65\%,15\%,0\mathrm{.}7],[$B$,10\mathrm{.}90,15,1\mathrm{.}2],[$C$,12\mathrm{.}25,15,1\mathrm{.}5]]$

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.

Open spreadsheet

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

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

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

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d$.$ Would you expect the standard deviation of Fund $P$ to be less than $15\%,$ equal to $15\%,$ or greater than $15\%?$

I. less than $15\%$