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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

Perpetualcold Refrigeration Co. (PRC) $1,750 1.00 18.00%
Zaxatti Enterprises (ZE) $1,000 1.50 11.50%
Water and Power Co. (WPC) $750 1.15 20.00%
Flitcom Corp. (FC) $1,500 0.60 22.50%

Suppose all stocks in Ariels portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?

Zaxatti Enterprises

Flitcom Corp.

Water and Power Co.

Perpetualcold Refrigeration Co.

Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?

Flitcom Corp.

Water and Power Co.

Zaxatti Enterprises

Perpetualcold Refrigeration 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:

Beta

Required Return

Ariels portfolio image text in transcribedimage text in transcribed
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: Suppose all stocks in Ariel's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Zaxatti Enterprises Flitcom Corp. Water and Power Co. Perpetualcold Refrigeration Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Flitcom Corp. Water and Power Co. Zaxatti Enterprises Perpetualcold Refrigeration Co. If the risk-free rate is 4% and the market risk premium is 5.5%, what is Ariel's portfolio's beta and required return? Fill in the following table

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