8. Portfolio risk and return

Emma holds a $5,000 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) $1,750 0.90 15.00% Kulatsu Motors Co. (KMC) $1,000 1.70 11.50% $750 1.15 18.00% Western Gas & Electric Co. (WGC) Flitcom Corp. (FC) $1,500 0.50 25.50% Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? O Flitcom Corp. O Western Gas & Electric Co. O Omni Consumer Products Co. O kulatsu Motors Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Omni Consumer Products Co. Okulatsu Motors Co. O Western Gas & Electric Co. O Flitcom Corp. 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