the tikitogs investment fund has a total capital of 500 million invested in five sha 1550077

The TikiTogs Investment Fund has a total capital of $500 million invested in five shares:Share Investment Share’s Beta CoefficientA $160 million 0.5B 120 million 2.0C 80 million 4.0D 80 million 1.0E 60 million 3.0The current risk-free rate is 8 percent, whereas market returns have the following estimated probability distribution for the next period:Probability Market Return0.1 10%0.2 120.4 130.2 160.1 17Required:1. Compute the expected return for the market. (3 marks)2. Compute the beta coefficient for the investment fund. (Remember, this is a portfolio.) (4 marks)3. What is the expected equation for the Security Market Line? (5 marks)4. Compute the fund’s required rate of return for the next period.(5 marks)5. Suppose Vijay TikiTogs, the president, receives a proposal for a new share. The investment needed to take a position in the stock is $50 million, it will have an expected return of 18 percent, and its estimated beta coefficient is 2.0. Should the new share be purchased? At what expected rate of return should Vijay be indifferent to purchasing a share? (8 marks)