-re: 0 of 10 pts 7 of 15 (0 complete) HW Score: 0%, 0 of 15 3-12 (similar to) Question Help Security market line) James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage securities at what it hopes will be bargain prices. The fund sponsor has suggested to James that the fund's performance will hinge on how the national economy performs in the coming year. Specifically, he suggested the following possible outcomes James has estimated the expected rate of return from this Investment is 18.00 percent. James wants to apply his recently acquired understanding of the security market ine concept to his analysis. a. If the risk-free rate of interest is currently 22 percent and the beta for the investment is 2.6, what is the slope of the security market wie for the real estate mortgage security Investment? b. James is also considering the investment of his money in a market index fund that has an expected rate of retum of 8 percent. What is the slope of the security market line (.e., the reward-to-risk ratio) for this investment opportunity? c. Based on your analysis of parts a and b above, which investment should James take? Why? a. Mthe risk-free rate of interest is currently 22 percent and the beta for the investment is 28. the slope of the secunty market dine for the real estate mortuge security investment is %. (Round to two decimal places.) ty 2 Data Table 0 2 recto Question Probability 1016 sos 30 Fund Returns TOON -0% State of Economy Rapid cancion and recovery Madest growth Gontinue rest Fast depression TO 1001 03 10) contos prin Done w MacBook Air mework: Homework 9 Re: 0 of 10 pts 7 of 15 15 complete HW Score: 32% 5-12 (similar to) Security marketine) James Francois conting whether to invest in a newly formed investment fund. The finds investment objectives to acquire home mortgage rates will be ben prom The usted to sues that the funds performance will hege on how the national economy perfome in the coming year. Specifically, he suggested the blowing possible outcome messed the investment is 18.00 percentare wants to cos recently acquired understanding of the mounty manet intercent to his ar the free rule of weeks 22 percent and the beta for the investment in 2 what is the super of the secwty marketine for the real estate martyr Heart verir? 1. iscoding the weet of his money in a marketindex funda expected to return of percent. What is the slope of security and c. Based on your ways of parts and above, which investment should Jamese Wiry teoretis cumenty 22 percent and the beta for the 20, ne op of the certy manet into the real morgon security sound Cable SE M Can Fan Den 2 9 0 $ A 6 7 5 3 2 P w