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Stock You plan to invest in the Kish Medge Fund, which has total capital of $500 million invested in five stocks: Investment Stock's Beta Coefficient

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Stock You plan to invest in the Kish Medge Fund, which has total capital of $500 million invested in five stocks: Investment Stock's Beta Coefficient $160 million 120 million 0.4 B 1.5 80 million 2.2 D 30 million 1.0 1.7 60 million Kish's beta coefficient can be found as a weighted average of its stocks betas. The risk-free rate is 5, and you believe the following probability distribution for future market returns is realistic Probability Market Return 0.1 -25% 0.2 0 0.4 12 0.2 32 0.1 51 a. What is the equation for the security Market Line (SMLX? (Hint: First determine the expected market return.) 1. N-5.25 +(8.8%) IL 5.2% (0.5%) In - 5.0%+ (8.8%) IV. - 3.9+(10.4%.) V. - 5.0%+ (0.5%)

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