Question
Ariel holds a $5,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stocks 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 stocks beta, is listed in the following table:
| Stock | Investment | Beta | Standard Deviation |
|---|---|---|---|
| Omni Consumer Products Co. (OCP) | $1,750 | 1.00 | 18.00% |
| Tobotics Inc. (TI) | $1,000 | 1.30 | 12.00% |
| Western Gas & Electric Co. (WGC) | $750 | 1.20 | 20.00% |
| Mainway Toys Co. (MTC) | $1,500 | 0.60 | 19.50% |
Suppose all stocks in Ariels portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
Tobotics Inc.
Mainway Toys Co.
Western Gas & Electric Co.
Omni Consumer Products Co.
Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?
Tobotics Inc.
Western Gas & Electric Co.
Omni Consumer Products Co.
Mainway Toys Co.
If the risk-free rate is 4% and the market risk premium is 5.5%, what is Ariels portfolios beta and required return? Fill in the following table:
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The Complete Guide To Option Selling How Selling Options Can Lead To Stellar Returns In Bull And Bear Markets
Authors: James Cordier , Michael Gross
2nd Edition
0071733485
