9. Problem 2.21 (Security Market Line) Stock 1.5 c eBook You plan to invest in the Kan Hedge Fund, which has total capital of $500 million Inwested in five stocka Investment Stock's Beta Coefficient 5160 million 0.3 120 million to million 1.9 0 30 million 3.0 60 million 10 kus beta coeficient can be found as a weighted average of the stockar batus. The risk-free note 794, and you believe the following probability distribution for future marunt return is realistic Probability Market Return 0.1 -25% 0.2 0 0.4 11 02 31 0.1 45 What is the equation for the security Mariat Line (SMU) (Hint: Pinot determine the expected market ratum) 1.-7.99 (42) IL -7.04. (6.5%) TIL - (5.6) TV (66) 70% +(5.6%) Kish's beta coefficient can be found as welghted average of its stocks betas. The risk-free rates 7%, and you believe the following probability distribution for future ma return is realistic Probability Market Return 0.1 -25% 0.2 0 0.4 11 0.2 31 0.1 45 What is the equation for the Security Market Une (SML) int: First determine the expected market rutum.) 1-7.99+(4.2%) 17.04. (6.6%) -3.8%+ (5.6%) IV -8% + (6,6%) -70% (5.6%) . Calculate Kah's required rate of retum. Do not round Intermediate calculations. Round your answer to two decimal places Suppose Rock, the president, receives a proposal from a company toeking new capital. The amount needed to take a position in the stock is $50 million, it has on pected return of 15% and its estimated betais 1.4. Should Kish Invest in the new company The new to be purchased At what expected rate et return should Klah be Inditerent to purchasing the stockr Round your arower to two teiciemal places