SECURITY MARKET LINE You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in five stocks: Stock Investment Stock's Beta Coefficient $160 million 120 million 2.1 80 million 80 million 1.0 60 million Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 6%, and you believe the following probability distribution for future market retums is realistic: Probability Market Return a. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.) I. n = 6.0% + (3.7%) II. = 6.6% + (4.7%) III. n = 6.0% + (3.3%) IV. r = 8.5% + (3.7%)b V. p = 8.5% + (3.3%)bi -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