Question: THIS IS ONE QUESTION! (Use the following data to answer the next two questions.) A newly developed lnd has total capital of $300 million invested

THIS IS ONE QUESTION!

(Use the following data to answer the next two questions.) A newly developed lnd has total capital of $300 million invested in three stocks: Stock Investment Stock's Beta A $150 million 1.0 B 80 million 0.8 C 70 million 0.5 The current risk-free rate is 4 percent, whereas market returns have the following estimated probability distribution for the next period: Probability Market Return 0. 1 10% 0.2 12% 0.4 13% 0.2 16% 0. 1 22% 24. Compute the fund's required rate of return for the next period. 25. The manager of the fund found an investment opportunity. The beta coefcient of the investment opportunity is 1.5 and its expected return is 17.5%. According to the CAPM, should the manager invest in that opportunity? Why or why not

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