The CFO of MediSearch plc believes that investing into a project which will develop a new drug for fighting the flu virus, promises a long$-$term annual return of

$13\%.$ The expected return of the market index is $R_M=14\mathrm{.}3\%,$ the volatility of the market index is ${}_M=11\%,$ and the risk$-$free asset earns $R_f=5\mathrm{.}4\%.$

The CFO has studied similar projects of other companies and believes that the covariance between the returns of this project and the returns of the market is

${}_{P,M}=0\mathrm{.}0102($in decimal form$).$

This question has $3$ parts $($i$.$e$.,$ you will be clicking "Verify" $3$ times$).$

What is the beta of the project? Enter your answer rounded to two decimal places.

Correct response: $0\mathrm{.}84+-0\mathrm{.}01$

According to the CAPM, what should be the required return of the project given its beta of $0\mathrm{.}84?$ Enter your answer rounded to two decimal places.

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Section Attempt $1$ of $1$