what is the market risk premium?

Question 3- Risk and rates of return Consider the following information for three stocks, Stock A, Stock B, and Stock C. The returns on each of the three stocks are positively correlated, but they a correlated. (That is, all of the correlation coefficients are between 0 and 1.) re not perfectly Stock Stock A Stock B Stock C Expected Return 10% 10 12 Standard Deviation 20% 20 20 Beta 1.0 1.0 1.4 Portfolio P has half of its funds invested in Stock A and half invested in Stock B. Portfolio Q has one third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium. What is the market risk premium RP? Define and explain the usefulness of the following measures of risk: standard deviation and beta