$(15$ Percent$)?$ JoJo the Cucumber has been offered $$14$ million to star in the lead role of the next

three JoJo Boy adventure movies. If JoJo takes this offer, he will have to forgo acting in other

Veggie movies that would pay him $$5\mathrm{.}5$ million at the end of each of the next three years. Assume

JoJo's personal cost of capital is $10\%$ per year.

a$.$ Should JoJo accept this deal offer? Why?

b$.$ If the other Veggie movies would pay him $$5\mathrm{.}5$ million at the beginning of each of the

next three years, which offer should JoJo take? Why?

$(10$ percent$)$ Assume that you manage a $$12\mathrm{.}00$ million mutual fund that has a beta of $1\mathrm{.}15$ and

a $9\mathrm{.}70\%$ required return. The risk$-$free rate is $2\mathrm{.}20\%.$ You now receive another $$15$ million,

which you invest in stocks with an average beta of $1\mathrm{.}05.$ What is the required rate of return on

the new portfolio? Do not round your intermediate calculations.