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8. Portfolio risk and return Elle 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 Elle 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 Andalusian Limited (AL) $3,500 0.80 15.00% $2,000 1.70 11.50% Zaxatti Enterprises (ZE) Water and Power Co. (WPC) Flitcom Corp. (FC) $1,500 1.15 16.00% $3,000 0.50 25.50% Suppose all stocks in Elle's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? O Zaxatti Enterprises O Flitcom Corp. O Andalusian Limited O Water and Power Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Flitcom Corp. O Andalusian Limited O Water and Power Co. O Zaxatti Enterprises If the risk-free rate is 7% and the market risk premium is 8.5%, what is Elle's portfolio's beta and required return? Fill in the following table: Beta Required Return Elle's portfolio
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