9. Conceptualquestions on portfolio and stand-alone risk Sam holds a $5,000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta, is listed in the following table: Stock Perpetualcold Refrigeration Co. (PRC) Kulatsu Motors Co(KMC) Water and Power Co. (WPC) Mainway Toys Co. (MTC) Investment $1,750 $1,000 least amount of unsystematic risk is $750 $1,500 Beta 0.90 1.90 1.20 0.30 Standard Deviation 9.00% 12.00% 18.00% 28.50% Suppose all stocks in Sam's 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 If the risk-free rate is 7.00% and the market risk premium is 9.50%, then Sam's portfolio will exhibit a beta of and a required return of

9. Conceptualquestions on portfolio and stand-alone risk Sam holds a $5,000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta, is listed in the following table: Stock Perpetualcold Refrigeration Co. (PRC) Kulatsu Motors Co(KMC) Water and Power Co. (WPC) Mainway Toys Co. (MTC) Investment $1,750 $1,000 least amount of unsystematic risk is $750 $1,500 Beta 0.90 1.90 1.20 0.30 Standard Deviation 9.00% 12.00% 18.00% 28.50% Suppose all stocks in Sam's 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 If the risk-free rate is 7.00% and the market risk premium is 9.50%, then Sam's portfolio will exhibit a beta of and a required return of

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 10PROB

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Ariel 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 Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $2,625 0.80 15.00% Kulatsu Motors Co. (KMC) $1,500 1.90 11.50% Western Gas & Electric Co. (WGC) $1,125 1.15 16.00% Mainway Toys Co. (MTC) $2,250 0.50 28.50% Suppose all stocks in Ariel’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Mainway Toys Co. Western Gas & Electric Co. Kulatsu Motors Co. Perpetualcold Refrigeration 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. Western Gas & Electric Co. Kulatsu Motors Co. Mainway Toys Co. If the risk-free rate is 4% and the market risk…
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