Question
Cheyenne 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
Cheyenne 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 0.80 15.00% Tobotics Inc. (TI) $1,000 1.50 11.50% Water and Power Co. (WPC) $750 1.15 16.00% Mainway Toys Co. (MTC) $1,500 0.50 22.50% Suppose all stocks in Cheyennes portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
Omni Consumer Products Co. Water and Power Co. Tobotics Inc. Mainway Toys Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?
Water and Power Co. Mainway Toys Co. Omni Consumer Products Co. Tobotics Inc. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Cheyennes portfolios beta and required return? Fill in the following table: Beta____ Required Return____
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