You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in five stocks: 1.8 Stock Investment Stock's Beta Coefficient A $160 million 0.4 B 120 million 1.2 80 million D 80 million 1.0 E 60 million 1.3 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 -29% 0.2 0 0.4 11 0.2 31 0.1 45 a. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.) I. r; = 6.7% + (6.2%)b; II. r; = 6.7% + (8.0%b; III. r; = 6.0% + (6.2%) IV. r; = 3.1% + (5.3%) V. r; = 6.0% + (8.0%)b; -Select- b. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places. % c. 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 $50 million, it has an expected return of 15%, and its estimated beta is 1.5. 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. %