(Security market line) James Fromholiz is considering whether to invest in a newly formed imvestment fund The fundis investment objoctive is to acquite home mortgage securitios at what it hopes will be bargain prices. The fund sponsor has saggested to James that tha furid s performance will hinge on how the natignal economy performs in the coming year. Specifically, he suggested the following possible cutoomes: James has estimatod the expoctod rate of refurn from thit investment is 22.00 percent. James wants to apply his secently acquered understanding of the security market line ooncept to his analyeis a. If the risk-free rate of interest is currently 2.2 percent and the beta for the irvestment is 2.2. what is the slope of the socurity markek line for the real estate migrtgage security irvestiment? b. James is also considering the investment of his money in a market index fund that has an expoctod rate of return of 11 percont. What is the slope of the sectaity maket line (i.e, the reward-to-isk ratio) for this investment opportunity? c. Based on your analysis of parts a and b above, which invesiment should James take? Why? a. If the risk-free rale of inferest is currently 2.2 percent and the beta for the irwestment is 2.2, the sfope of the security market line for the reat entale mortgage: security irvestment is 4. (Round to two decimal places.) b. James is also considering the investmient of his money in a market index fund that his an expected rate of rotum of 11 porcent. The slope of the secumty mackex line (ies, the reward-to-risk ratio) for this imvestment opportunity is Qs. (Round to two decimal places.) Data table I's investruent pertormance w cept to his ana secunty marki 11 percent. market line 1 11 percont. inwestment is his (Round lo fwo decimnd places.) c. Based on your analysis of parts a and b above, Which investrnent shoudd James take? Why? (Snlect the best cheice teiosk ) A. Tho market index fund. 8. The real estane portfolio: C. Cannot be determinod from the information given in this probleme