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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
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 Andalusian Limited (AL) Kulatsu Motors Co. (KMC) Water and Power Co. (WPC) Flitcom Corp. (FC) Investment $3,500 $2,000 $1,500 $3,000 Beta 0.90 1.50 1.15 0.40 Standard Deviation 12.00% 11.50% 18.00% 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? 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 Q Kulatsu Motors Co O Water and Power Co. Q Water and Power Co O Kulatsu Motors Co O Andalusian Limited O Flitcom Corp If the risk-free rate is 7% and the market risk premium is 9%, what is Ariel's portfolio's beta and required return? Fill in the following table: Beta Required Return Ariel's portfolio 8.82% 15.17% 18.81% 21.53%
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