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3. Portfolio risk and return Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's
3. Portfolio risk and 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) Kulatsu Motors Co. (KMC) Three Waters Co. (TWC) Flitcom Corp. (FC) Standard Deviation 12.00% Investment $2,625 $1,500 $1,125 $2,250 Beta 0.90 1.90 12.00% 18.00% 1.20 0.40 28.50% Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? 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. Okulatsu Motors Co. Flitcom Corp. O Omni Consumer Products Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Three Waters Co. Okulatsu Motors Co. Flitcom Corp. Omni Consumer Products Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return Emma's portfolio Emma's portfolio
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