Ch 08: Assignment - Risk and Rates of ReturnElle nolas a $5,000 portrollo that consists or rOur stocKs. Her investment in eacn stock, as well as each stock's beta,is listed in the following table:Standard DeviationStockInvestmentBetaPerpetualcold Refrigeration Co. (PRC)$1,7500.9012.00%Zaxatti Enterprises (ZE)1.70$1,00011.00%Western Gas & Electric Co. (WGC)$7501.1018.00%Makissi Corp. (MC)$1,5000.4025.50%Suppose all stocks in the portfolio were equally weightedSuppose all stocks in Elle's portfolio were equallyweighted. Which of these stocks would contribute theWhich of these stocks would have the least amount ofleast market risk to the portfolio?standalone risk?Makissi Corp.Perpetualcold Refrigeration Co.Makissi Corp.Western Gas & Electric Co.Zaxatti EnterprisesZaxatti EnterprisesWestern Gas & Electric CoO Perpetualcold Refrigeration Co.If the risk-free rate is 7% and the market risk premium is 9%, what is Elle's portfolio's beta and required return? Fillin the following table:Required ReturnBetaElle's portfolioO O O O

Multiple choice question: First oneBeta is an indicator of market risk. Hence the stock with least…

Answered: Ch 08: Assignment - Risk and Rates of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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