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. Conceptualquestions on portfolio and stand - alone risk Van holds a $ 1 0 , 0 0 0 portfolio that consists of four stocks.
Conceptualquestions on portfolio and standalone risk
Van holds a $ portfolio that consists of four stocks. His investment in each stock, as well as each stocks beta, is listed in the following table:
Stock
Investment
Beta
Standard Deviation
Andalusian Limited AL $
Tobotics Inc. TI $
Water and Power CoWPC $
Mainway Toys CoMTC $
Suppose all stocks in Vans 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 riskfree rate is and the market risk premium is then Vans portfolio will exhibit a beta of and a required return of
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