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

$11\%.$ The expected return of the market index is $R_M=11\mathrm{.}7\%,$ the volatility of the market index is ${}_M=10\mathrm{.}4\%,$ and the risk$-$free asset earns $R_f=$

$3\mathrm{.}4\%.$ 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 ${}_{P,M}=0\mathrm{.}0071($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: $0\mathrm{.}66+-0\mathrm{.}01$

According to the CAPM, what should be the required return of the project given its beta of $0\mathrm{.}66?$ Enter your answer rounded to two decimal places.

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Section Attempt $1$ of $1$