Question: Kiah's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 4%, and you believe the following probability
Kiah's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 4%, and you believe the following probability distribution for future market returns is realstic: a. What is the equation for the Security Market une (SML)? (Hint Fint determine the expected market return.) 1,n=2.4%+(6.7%)bit.n=4.0%+(8.2%)bIII.n=1.4%+(8.775)b.Nn=4.0h+(6.74)hV1n1=2.4w+(0.2)b b. Catculate kish's required rate of retien. Do not round intermedime cakculations. Hound your answer to two decimpl places The new stock be purchased. At what expected rate of return shesid Wosh be indifferent to purchasing the stock? Reund your answer to two decimal places
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