You are presently invested in the luther fund, a very broad-based mutual fund that invests in stocks and other securities. the luther fund has an expected return of 14% and a volatility of 20%. risk-free treasury bills are currently offering returns of 4%. you are considering adding a precious metal fund to your current portfolio. the metal fund has a volatility of 30% and a correlation of -20% with the luther fund.

(a) the beta of the precious metal fund with the luther fund is closest to:

(1) -0.3
(2) -0.6
(3) 0.3
(4) 0.6
(b) the expected return on the previous metal fund is closest to:

(1) -3%
(2) 4%
(3) 1%
(4) 10%

(c) can a risky stock have an expected return lower than the risk-free rate? explain.