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ortfolio risk and return Elle holds a $5,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta,
ortfolio risk and return Elle holds a $5,000 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 Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $1,750 0.80 12.00% Kulatsu Motors Co. (KMC) $1,000 1.50 11.50% Water and Power Co. (WPC) $750 1.15 16.00% Makissi Corp. (MC) $1,500 0.40 22.50% Suppose all stocks in Elle's portfolio were equally Suppose all stocks in the portfolio were equally weighted. weighted. Which of these stocks would contribute the Which of these stocks would have the least amount of least market risk to the portfolio? standalone risk? O Makissi Corp O Kulatsu Motors Co. Makissi Corp Kulatsu Motors Co. O Water and Power Co. O Water and Power Co. O Perpetualcold Refrigeration Co. O Perpetualcold Refrigeration Co. If the risk-free rate is 4% and the market risk premium is 6%, 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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