$.$ Consider the information in the table below for Stocks A$,$ B$,$ and C$.$ The returns on the three stocks are positively correlated, but they are not perfectly correlated. $($That is$,$ each of the correlation coefficients is between $0$ and $1).$

Fund P has one$-$third of its funds invested in each of the three stocks. The risk$-$free rate is $5\mathrm{.}5\%,$ and the market is in equilibrium. $($That is$,$ required returns equal expected returns.$)$

What is the market risk premium?

What is the beta of Fund P$?$

What is the required return of Fund P$?$

Would you expect the standard deviation of Fund P to be less than $15\%,$ equal to $15\%,$ or greater than $15\%?$

Stock Expected Return Standard Deviation Beta

A $9\mathrm{.}55\%15\%0\mathrm{.}9$

B $10\mathrm{.}45\%15\%1\mathrm{.}1$

C $12\mathrm{.}70\%15\%1\mathrm{.}6$