Kevin holds a $10,000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta, is listed in the following table: Stock Perpetualcold Refrigeration Co. (PRC) Zaxatti Enterprises (ZE) Western Gas & Electric Co. (WGC) Mainway Toys Co. (MTC) Investment Beta Standard Deviation $3,500 1.00 $2,000 1.30 $1,500 1.10 $3,000 0.40 least amount of unsystematic risk is 12.00% 11.00% 20.00% 19.50% Suppose all stocks in Kevin's portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio is . Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the If the risk-free rate is 6.00% and the market risk premium is 8.50%, then Kevin's portfolio will exhibit a beta of and a required return of
Kevin holds a $10,000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta, is listed in the following table: Stock Perpetualcold Refrigeration Co. (PRC) Zaxatti Enterprises (ZE) Western Gas & Electric Co. (WGC) Mainway Toys Co. (MTC) Investment Beta Standard Deviation $3,500 1.00 $2,000 1.30 $1,500 1.10 $3,000 0.40 least amount of unsystematic risk is 12.00% 11.00% 20.00% 19.50% Suppose all stocks in Kevin's portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio is . Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the If the risk-free rate is 6.00% and the market risk premium is 8.50%, then Kevin's portfolio will exhibit a beta of and a required return 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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Transcribed Image Text:Kevin holds a $10,000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta, is listed in the following table:
Stock
Perpetualcold Refrigeration Co. (PRC)
Zaxatti Enterprises (ZE)
Western Gas & Electric Co. (WGC)
Mainway Toys Co. (MTC)
Investment Beta
$3,500 1.00
$2,000
1.30
$1,500
1.10
$3,000
0.40
Standard Deviation
12.00%
11.00%
20.00%
19.50%
Suppose all stocks in Kevin's portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio is
. Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the
least amount of unsystematic risk is
If the risk-free rate is 6.00% and the market risk premium is 8.50%, then Kevin's portfolio will exhibit a beta of
and a required return of
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