Ch 08: Assignment - Risk and Rates of Return Attempts: Average: 73 8. Portfolio risk and return Ariel holds a $7,500 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 Beta Standard Deviation Investment $2,625 0.90 12.00% $1,500 Andalusian Limited (AL) Zaxatti Enterprises (ZE) Western Gas & Electric Co. (WGC) Mainway Toys Co. (MTC) 1.90 1.20 12.00% 18.00% $1,125 $2,250 0.40 28.50% Suppose all stocks in Ariel's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? O Andalusian Limited O Mainway Toys Co. O Zaxatti Enterprises O Western Gas & Electric Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Mainway Toys Co. O Andalusian Limited O Western Gas & Electric Co. O Zaxatti Enterprises If the risk-free rate is 7% and the market risk premium is 8.5%, what is Ariel's portfolio's beta and required return? Fill in the following table: Beta Required Return Ariel's portfolio