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Ch8. 9. Janet holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stocks beta, is listed

Ch8. 9.

Janet holds a $7,500 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) $2,625 0.90 9.00%
Tobotics Inc. (TI) $1,500 1.70 11.00%
Three Waters Co. (TWC) $1,125 1.10 18.00%
Mainway Toys Co. (MTC) $2,250 0.30 25.50%

Suppose all stocks in Janets portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio is ________ . Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the least amount of unsystematic risk is ________ .

If the risk-free rate is 4.00% and the market risk premium is 6.50%, then Janets portfolio will exhibit a beta of ____ and a required return of _________ .

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