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5. Portfolio risk and return Elle holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's
5. Portfolio risk and return Elle holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, s listed in the following table: Stock Andalusian Limited (AL) Zaxatti Enterprises (ZE) Western Gas & Electric Co. (WGC) Flitcom Corp. (FC) $2,625 $1,500 $1,125 $2,250 Beta 0.80 1.50 1.10 0.40 Standard Deviation 12.00% 11 .00% 16.00% 22.50% Suppose all stocks in Elle's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of standalone risk? O Flitcom Corp. O Andalusian Limited O Western Gas & Electric Co. O Zaxatti Enterprises Western Gas & Electric Co. O Andalusian Limited O Zaxatti Enterprises O Flitcom Corp. If the risk-free rate is 7% and the market risk premium is 9%, what is Elle's portfolio's beta and required return? Fill in the following table: Beta Required Return Elle's portfolio 0.580 0.735 1.298 0.865 18.34% 17.01% 14.79% 20.84%
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