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Elle 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
Elle 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 Andalusian Limited (AL) Tobotics Inc. (TI) Water and Power Co. (WPC) Flitcom Corp. (FC) Investment Beta Standard Deviation $2,625 0.80 9.00% $1,500 1.70 11.00% $1,125 1.10 16.00% $2,250 0.30 25.50% Suppose all stocks in Elle's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? o Tobotics Inc. . Flitcom Corp. O Andalusian Limited o Water and Power Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? o Water and Power Co. O Andalusian Limited o Flitcom Corp. Tobotics Inc. If the risk-free rate is 4% and the market risk premium is 5.5%, what is Elle's portfolio's beta and required return? Fill in the following table: Beta Required Return Elle's portfolio
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