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Ariel 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
Ariel 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 Perpetualcold Refrigeration Co. (PRC) Kulatsu Motors Co. (KMC) Three Waters Co. (TWC) Mainway Toys Co. (MTC) Investment $1,750 $1,000 $750 $1,500 Beta 0.90 1.50 1.10 0.40 Standard Deviation 12.00% 11.00% 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? Mainway Toys Co. O Three Waters Co. Okulatsu Motors Co. Perpetualcold Refrigeration Co. Perpetualcold Refrigeration Co. Okulatsu Motors Co. Three Waters Co. Mainway Toys Co. 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
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