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You plan to invest in the Kish Hedge Fund , which has total capital of $ 5 0 0 million invested in five stocks :
You plan to invest in the Kish Hedge Fund which has total capital of $ million invested in five stocks : Stock Investment Stock's Beta Coefficient A $ B million C million D million E million Kish's beta coefficient can be found as a weighted average of its stocks betas The risk free rate is and you believe the following probability distribution for future market returns is realistic : Probability Market Return a What is the equation for the Security Market Line SML Hint : First determine the expected market return b bi IV V b Select b Calculate Kish's required rate of return Do not round intermediate calculations Round your answer to two decimal places 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 $ million it has an expected return of and its estimated beta is 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
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