Security market line) James Fromholtz is considering whether to invest in a newly formed investment fund. The funds 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 EEE James has estimated the expected rate of return from this investment is 17.00 percent James wants to apply his recently acquired understanding of the security market line concept to his analysis a. "the risk-free rate of interest is currenty 2.0 percent and thie beta for the investment is 24, what is the slope of the seo nty market line for the real estate mortgage security investment? b. James alsoconsaderngthe mesment ons money in a market index had that has an expected rate of return of 8 percent. What is the slopeofthe security market ine (Le the rewaroHosk ratio) tor this investment opportunity? c. Based on your analysis of parts a and b above, which investment should James take? Why? a. the risk ree rate of interest is currently 2 0 percent and the beta for the investrment is 24 the slope of decimal places security market l efor tho real estate mortgage security investment is (Round to two Enter your answer in the answer box and then click Check Answer parts 2 Data Table Fund Returns State of Economy Rapid expansion and recovery Modest growth Continued recession Falls into depression Probability 5% 40% 50% 5% 100% 30% 10% -100% Print Done