eBook You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in live stocks: Stock Investment Stock's Beta Coefficient A $160 million 0.8 120 million 1.2 c 80 million 2.1 D 80 million 1.0 60 million 1.9 Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 4%, and you believe the following probability distribution for future market returns is realistic: Probability Market Return 0.1 -30% 0.2 0.4 14 0.2 31 0.1 48 a. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market retum.) In = 3.6% + (9.6%) III = 3.6% + (9.5%) III. r = 4.0% + (9.6%) IV. n = 4.5% + (11.1%) V n = 4.0%+ (9.5%) -Select- b. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places. c. Suppose Rick Kish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has an expected return of 15%, and its estimated beta is 1.4. Should Kish invest in the new company? The new stock -Select- be purchased At what expected rate of return should kish be indifferent to purchasing the stock? Round your answer to two decimal places. Check My Work (5 TE Icon Rey