You 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 0.5 120 million 1.1 80 million 1.9 D 80 million 1.0 E 60 million 17 Kinly's beta coefficient can be found as a weighted average of its stocks betas. The risk tree rate is 3%, and you believe the following probability distribution for future market returns is realistic Probability Market Return 0.1 25 o 0.4 14 0.2 28 0.1 53 a. What is the equation for the Security Market Line (SMD)? (Hint: First determine the expected market return.) I. - 7.0%+ (11.0%) Il n = 7.0% + (10.146) TIE - 3.0%+ (11.0%) IV. n 2.6%. + (10.4) V- 3.0%+ (10.1996) a. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.) L. - 7.0% + (11.0%) 11. - 7.0%+ (10.19% 111. - 3.0%+ (11.09.) IV - 2.6% (10.4%) Vin - 30% + (10.1%) Select b. Calculate Kh's required rate of retur. Do not round Intermediate calculation, Hound your answer to two decimal places, Suppo Rick Kih, the president, receives a proposal from a company reking new capital. The amount needed to take a position in the stock is $50 million, has an expected retum of 14%, and its estimated betais 15. Should Kish Inwest in the new company? The new stock ile be purchased at what expected rate of return should Kill be interest to puretung the stock Round your anwer to two decima ploce