Portfolio risk and return

Ariel 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:

Suppose all stocks in Ariel's portfolio were equally weighted. Which of these stocks would

contribute the least market risk to the portfolio?

Perpetualcold Refrigeration Co$.$

Zaxatti Enterprises

Mainway Toys Co$.$

Western Gas & Electric Co$.$

Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the

least amount of stand$-$alone risk?

Perpetualcold Refrigeration Co$.$

Mainway Toys Co$.$

Western Gas & Electric Co$.$

Zaxatti Enterprises

If the risk$-$free rate is $7\%$ and the market risk premium is $8\mathrm{.}5\%,$ what is Ariel's portfolio's beta and

required return? Fill in the following table:

Ariel's portfolio

Beta Required Return

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