Emma 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 Omni Consumer Products Co. (OCP) Zaxatti Enterprises (ZE) Three Waters Co. (TWC) Mainway Toys Co. (MTC) O Zaxatti Enterprises O Mainway Toys Co. O Omni Consumer Products Co. Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? .O Three Waters Co. O Omni Consumer Products Co. O Three Waters Co. O Zaxatti Enterprises O Mainway Toys Co. Investment Beta Standard Deviation $2,625 0.90 $1,500 1.90 $1,125 1.20 $2,250 0.30 Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Emma's portfolio 9.00% 12.00% 18.00% 28.50% If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return

Emma 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 Omni Consumer Products Co. (OCP) Zaxatti Enterprises (ZE) Three Waters Co. (TWC) Mainway Toys Co. (MTC) O Zaxatti Enterprises O Mainway Toys Co. O Omni Consumer Products Co. Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? .O Three Waters Co. O Omni Consumer Products Co. O Three Waters Co. O Zaxatti Enterprises O Mainway Toys Co. Investment Beta Standard Deviation $2,625 0.90 $1,500 1.90 $1,125 1.20 $2,250 0.30 Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Emma's portfolio 9.00% 12.00% 18.00% 28.50% If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Elle holds a $10,000 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 Omni Consumer Products Co. (OCP) $3,500 0.80 9.00% Kulatsu Motors Co. (KMC) $2,000 1.90 11.00% Western Gas & Electric Co. (WGC) $1,500 1.10 16.00% Makissi Corp. (MC) $3,000 0.30 28.50% Suppose all stocks in Elle’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Kulatsu Motors Co. Omni Consumer Products Co. Western Gas & Electric Co. Makissi Corp. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Makissi Corp. Omni Consumer Products Co. Kulatsu Motors Co. Western Gas & Electric Co. If the risk-free rate is 7% and the market risk premium is 8.5%,…
Juanita 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 Omni Consumer Products Co. (OCP) $2,625 0.90 9.00% Tobotics Inc. (TI) $1,500 1.90 11.00% Three Waters Co. (TWC) $1,125 1.10 18.00% Flitcom Corp. (FC) $2,250 0.30 28.50% Suppose all stocks in Juanita’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 least amount of unsystematic risk is ? . If the risk-free rate is 5.00% and the market risk premium is 7.50%, then Juanita’s portfolio will exhibit a beta of ? and a required return of ?.
Cheyenne 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 Omni Consumer Products Co. (OCP) $2,625 1.00 9.00% Kulatsu Motors Co. (KMC) $1,500 1.70 11.50% Three Waters Co. (TWC) $1,125 1.15 20.00% Mainway Toys Co. (MTC) $2,250 0.30 25.50% Suppose all stocks in Cheyenne’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Three Waters Co. Omni Consumer Products Co. Kulatsu Motors Co. Mainway Toys Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Mainway Toys Co. Three Waters Co. Kulatsu Motors Co. Omni Consumer Products Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Cheyenne’s…
Emma 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 Omni Consumer Products Co. (OCP) $2,625 0.80 12.00% Tobotics Inc. (TI) $1,500 1.30 11.00% Water and Power Co. (WPC) $1,125 1.10 16.00% Makissi Corp. (MC) $2,250 0.40 19.50% Suppose all stocks in Emma’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Omni Consumer Products Co. Makissi Corp. Water and Power 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? Water and Power Co. Omni Consumer Products Co. Tobotics Inc. Makissi Corp. If the risk-free rate is 4% and the market risk premium is 5.5%, what is Emma’s portfolio’s beta and required…
Cheyenne 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 Andalusian Limited (AL) $1,750 0.90 15.00% Tobotics Inc. (TI) $1,000 1.70 11.50% Water and Power Co. (WPC) $750 1.15 18.00% Makissi Corp. (MC) $1,500 0.50 25.50% Suppose all stocks in Cheyenne’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Water and Power Co. Makissi Corp. Tobotics Inc. Andalusian Limited Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Andalusian Limited Makissi Corp. Tobotics Inc. Water and Power Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Cheyenne’s portfolio’s beta and required return? Fill in the…
Emma 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 1.00 18.00% Zaxatti Enterprises (ZE) $1,000 1.50 12.00% Water and Power Co. (WPC) $750 1.20 20.00% Flitcom Corp. (FC) $1,500 0.60 22.50% Suppose all stocks in Emma’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Perpetualcold Refrigeration Co. Water and Power Co. Flitcom Corp. Zaxatti Enterprises Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Water and Power Co. Flitcom Corp. Zaxatti Enterprises Perpetualcold Refrigeration Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma’s…
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: Stock Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $1,750 1.00 15.00% Tobotics Inc. (TI) $1,000 1.50 11.00% Three Waters Co. (TWC) $750 1.10 20.00% Mainway Toys Co. (MTC) $1,500 0.50 22.50% 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. Tobotics Inc. Three Waters 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. Tobotics Inc. Three Waters Co. Mainway Toys Co. If the risk-free rate is 7% and the market risk premium is 8.5%, what is Ariel’s portfolio’s beta and required return? Fill in…
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…
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…
Neha is an analyst at a wealth management firm. One of her clients holds a $7,500 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Investment Allocation Beta Standard Deviation Atteric Inc. 35% 0.750 0.53% Arthur Inc. 20% 1.400 0.57% Li Corp. 15% 1.300 0.60% Transfer Fuels Co. 30% 0.300 0.64% Neha calculated the portfolio’s beta as 0.828 and the portfolio’s expected return as 8.55%. Neha thinks it will be a good idea to reallocate the funds in her client’s portfolio. She recommends replacing Atteric Inc.’s shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 4.00%, and the market risk premium is 5.50%. 1. According to Neha’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change? 0.86% 0.67% 1.07% 0.99%…
Rolly is a financial investor who actively buys and sells in the securities market. Now she has aportfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and$5,500 of Share D. Compute the weights of the assets in Rolly’s portfolio?
Brandon is an analyst at a wealth management firm. One of his clients holds a $5,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Investment Allocation Beta Standard Deviation Atteric Inc. (AI) 35% 0.750 38.00% Arthur Trust Inc. (AT) 20% 1.500 42.00% Li Corp. (LC) 15% 1.100 45.00% Baque Co. (BC) 30% 0.300 49.00% Brandon calculated the portfolio’s beta as 0.818 and the portfolio’s required return as 8.4990%. Brandon thinks it will be a good idea to reallocate the funds in his client’s portfolio. He recommends replacing Atteric Inc.’s shares with the same amount in additional shares of Baque Co. The risk-free rate is 4%, and the market risk premium is 5.50%. According to Brandon’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change? (Note: Do not round your…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS