Suppose that the borrowing rate that your client faces is $2\%.$ Assume that the

S&P$500$ index has an expected return of $3\%$ and standard deviation of $15\%,$ that the

risk$-$free rate is $1\%.$ Imagine that you are managing a fund with an expected return of

$5\%$ and a standard deviation of $30\%.$ What is the largest percentage fee that a client

who currently is lending will be willing to pay to invest in your fund?

$0\mathrm{.}0\%$

$1\mathrm{.}0\%$

$1\mathrm{.}5\%$

$2\mathrm{.}0\%$