You are currently invested in the Omega Fund, a broad-based fund with an expected return of 15% and a volatility of 20%, as well as in risk-free Treasury Bills paying 3%. Your broker suggests that you add a real estate fund to your porfolio. The real estate fund has an expected return of 9%, a volatility of 35%, and a correlation of 0.10 with the Omega Fund.

12. Considering the above information, what is the beta of the real estate fund with the Omega Fund?

A. 0.165. B. 0.225. C. 0.210. D. 0.162. E. none of the above.

13. Considering the above information, what is the required return that makes the real estate fund an attractive addition to your portfolio?

A. 6.1%. B. 5.6%. C. 5.1%. D. 4.9%. E. none of the above.