You plan to invest in the Kish Hedge Fund, which has total capital of $$500$ million invested in five stocks:

Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk$-$free rate is $7\%,$ and you believe the following probability distribution for future market returns is realistic:

a$.$ What is the equation for the Security Market Line $($SML$)?($Hint: First determine the expected market return.$)$

I. $r_i=7\mathrm{.}0\%+(6\mathrm{.}3\%)b_i$

$II.r_i=8\mathrm{.}3\%+(5\mathrm{.}9\%)b_i$

III. $r_i=7\mathrm{.}0\%+(5\mathrm{.}7\%)b_i$

$IV.r_i=5\mathrm{.}4\%+(6\mathrm{.}3\%)b_i$

$V.r_i=5\mathrm{.}4\%+(5\mathrm{.}7\%)b_i$

$-$Select$-Y$

b$.$ Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places.

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$1\mathrm{.}5.$ 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.

$\%$