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...

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 portfolio’s beta and required return? Fill in the following table:

	Beta	Required Return
Emma’s portfolio

Jun 02, 2022

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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...

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