The McAlhany Investment Fund has total capital of $500 million invested in five stocks: Stock A: Investment $160 Million Stock's Beta Coefficient 0.5 Stock B: Investment $120 Million Stock's Beta Coefficient 2.0 Stock C: Investment $ 80 Million Stock's Beta Coefficient 4.0 Stock D: Investment $ 80 Million Stock's Beta Coefficient 1.0 Stock E: Investment $ 60 Million Stock's Beta Coefficient 3.0 The Current risk free rate is 8 percent. Market returns have the following estimated probability distribution for the next period: Probability Market Return 0.1 10% 0.2 12% 0.4 13% 0.2 16% 0.1 17% E. Suppose John McAlhany, the president, receives a proposal for a new stock. The investment needed to take a position in the stock is $50 million, it will have an expected return of 18%, and its estimated beta coefficient is 2.0. Should the firm purchase the new stock? At what expected rate of return should McAlhany be indifferent to purchasing the stock