In the middle of 2021 , Alice had been working for a year as an analyst for an investment company that specialises in serving very wealthy clients. These clients often purchase shares in closely held investment funds with very limited numbers of shareholders. On 20 February 2020, stock markets across the world suddenly crashed after growing instability due to the COVID-19 pandemic. Alice's firm, however, saw this market collapse as an opportunity to put together a fund that purchases some of the securities that investors shunned by acquiring them at bargain prices and holding them until the market for those securities recovers. The investment company began putting together sales information concerning the possible performance of the new fund and made the following predictions regarding the possible performance of the fund over the ensuing year as a function of the performance of the economy: Alices boss asked her to perform a preliminary analysis of the new fund's performance potential for the coming year. Specifically, he asked that Alice addresses each of the following issues: Questions: 1. What are the expected rate of return and standard deviation? 2+2.5=4.5 points 2. What is the reward to risk ratio for the fund based on the fund's standard deviation as a measure of risk? 2 pints 3. What is the expected rate of return for the fund based on the Capital Asset Pricing Model (CAPM)? 4. Based on your analysis, do you think the proposed fund offered a fair return given its risk? Explain why or why not. 3.5 points 2 points In addition to the information provided above, Alice observed that the risk-free rate of interest for the following year was 4%, the market risk premium was 5.5% and the beta for the new investment was 3.5%. (Show all calculations/ workings)