Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table: Stock Omni Consumer Products Co. (OCP) Zaxatti Enterprises (ZE) Three Waters Co. (TWC) Mainway Toys Co. (MTC) O Zaxatti Enterprises O Mainway Toys Co. O Omni Consumer Products Co. Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? .O Three Waters Co. O Omni Consumer Products Co. O Three Waters Co. O Zaxatti Enterprises O Mainway Toys Co. Investment Beta Standard Deviation $2,625 0.90 $1,500 1.90 $1,125 1.20 $2,250 0.30 Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Emma's portfolio 9.00% 12.00% 18.00% 28.50% If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return
Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table: Stock Omni Consumer Products Co. (OCP) Zaxatti Enterprises (ZE) Three Waters Co. (TWC) Mainway Toys Co. (MTC) O Zaxatti Enterprises O Mainway Toys Co. O Omni Consumer Products Co. Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? .O Three Waters Co. O Omni Consumer Products Co. O Three Waters Co. O Zaxatti Enterprises O Mainway Toys Co. Investment Beta Standard Deviation $2,625 0.90 $1,500 1.90 $1,125 1.20 $2,250 0.30 Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Emma's portfolio 9.00% 12.00% 18.00% 28.50% If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return
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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Transcribed Image Text:Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table:
Stock
Omni Consumer Products Co. (OCP)
Zaxatti Enterprises (ZE)
Three Waters Co. (TWC)
Mainway Toys Co. (MTC)
O Zaxatti Enterprises
O Mainway Toys Co.
O Omni Consumer Products Co.
.O Three Waters Co.
O Omni Consumer Products Co.
O Three Waters Co.
O Zaxatti Enterprises
O Mainway Toys Co.
Investment
$2,625
$1,500
$1,125
$2,250
Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
Emma's portfolio
Beta
0.90
1.90
1.20
0.30
Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount stand-alone risk?
Beta
Standard Deviation
9.00%
12.00%
18.00%
28.50%
If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma's portfolio's beta and required return? Fill in the following table:
Required Return
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