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8. Portfolio risk and return Ariel holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's
8. Portfolio risk and return Ariel holds a $10,000 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 Investment Beta Standard Deviation Omni Consumer Products Co. (OCP) $3,500 0.90 15.00% Tobotics Inc. (TI) $2,000 1.50 11.00% Western Gas & Electric Co. (WGC) $1,500 1.10 18.00% Makissi Corp. (MC) $3,000 0.50 22.50% Suppose all stocks in Ariel's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Omni Consumer Products Co. Tobotics Inc. Makissi Corp. O Western Gas & Electric Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Omni Consumer Products Co. Makissi Corp. Tobotics Inc. Western Gas & Electric Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Ariel's portfolio's beta and required return? Fill in the following table: Beta Required Return Ariel's portfolio
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