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Emma holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stocks beta, is listed in the

Emma holds a $10,000 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) $3,500 1.00 15.00%
Tobotics Inc. (IT) $2,00 !.50 11.50%
Three Waters Co. (TWC) $1,500 1.15 20.00%
Makissi Corp. (MC) $3,000 .50 22.50%

Suppose all stocks in Emmas portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?

Makissi Corp.

Omni Consumer Products Co.

Three Waters Co.

Tobotics Inc.

Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?

Makissi Corp.

Tobotics Inc.

Three Waters Co.

Omni Consumer Products Co.

If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emmas portfolios beta and required return? Fill in the following table:

Beta

Required Return

Emmas portfolio

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