Part II. For each of the following show all relevant work. 26. Assume that the capital market is in equilibrium. The risk-free rate is 4% and the market portfolio is characterized by an expected return of 10% and and a standard deviation of 9%. Consider 3 securities that have the following covariances of return with the market: 01M= .0108, 02M = -0027, 03M = .0054. a) Find the betas of each of the three securities b) Find the equation of the security market line. c) Find the expected returns of the three securities. d) Find the B of a security that has an expected return of 15%. e) If a portfolio consists of $25,000 in security 1, $15,000 in security 2 and $10,000 in security 3, find the B of the portfolio. f) If the manger of the portfolio in part e believes that the portfolio will provide a return of 12%, should you invest in that portfolio? Why or why not? of default, the bond