You plan to invest in a Hedge Fund, which has a total capital of $1 billion invested in 5 stocks:

StockInvested (mil) Beta

A $2500.80

B $150 1.20

C $300 1.30

D $175 0.90

E $125 1.10

Total$1,000

The risk free rate is 3.80% and you believe the following probability distribution for future market returns is realistic:

ProbabilityMarket Return

0.1 3.5%

0.2 4.5%

0.4 6.0%

0.2 7.5%

0.1 9.5

What is the market required return of the fund portfolio? Show work please