Ch 08:End-of-Chapter Problems. Risk and Rates IRON 8. Problem 8.13 (CAPM, Portfolio Risk, and Return) Problem Walk-Through Consider the following information for stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (Thats, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta 16% 16 12 11.10 Fund Phas one-third of ts funds invested in each of the three stocks. The risk free rate is 4.5%, and the market is in equilibrium. That is required returns equal expected returns.) What is the market risk premium r ra) Round your answer to one decimal place What is the best Fund ? Dorot round Intermediate calculations. Round your answer to two decimal places Do not found intermediate calculations. Round your answer to two decal slaces What the required return of Fund d. what would you expect the standard deviation of Fund to be? I less than 16 Il Greater than 10% III. oual to 10