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u 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
u 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 A $160 million 0.6 B 120 million 1.3 C 80 million 1.7 D 80 million 1.0 E 60 million 1.9 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 returns is realistic: Probability Market Return 0.1 -30 % 0.2 0 0.4 11 0.2 28 0.1 48 What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.) ri = 6.0% + (5.8%)bi ri = 3.1% + (5.6%)bi ri = 6.0% + (4.7%)bi ri = 5.4% + (5.8%)bi ri = 5.4% + (4.7%)bi -Select- Calculate
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