You are currently invested in the Luther Fund, a very broad-based mutual fund that invests in stocks and other securities. The Luther Fund has an expected return of 14% and a volatility of 20%. Risk-free Treasury Bills currently offer returns of 4%. You are considering adding a precious metals fund to your current portfolio. The metal fund has a volatility of 30% and a correlation of -20% with the Luther Fund.

(a) The beta of the precious metals fund with the Luther Fund is closest to ?

(b) The expected return of the metal fund above is closest to ?

(c) Can a risky stock have an expected return that is less than the risk-free rate? Explain.