table: $20,000 portrong that con SLUCK, as well as As Deta, is listed in the following Stock Investment Beta Standard Deviation Omni Consumer Products Co. (OCP) $3,500 1.00 18.00% Zaxatti Enterprises (ZE) $2,000 1.50 11.50% Western Gas & Electric Co. (WGC) $1,500 1.15 20.00% Filtcom Corp. (FC) $3,000 0.60 22.50% Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Filtcom Corp. Western Gas & Electric Co. O Omni Consumer Products Co. O Zaxatti Enterprises
table: $20,000 portrong that con SLUCK, as well as As Deta, is listed in the following Stock Investment Beta Standard Deviation Omni Consumer Products Co. (OCP) $3,500 1.00 18.00% Zaxatti Enterprises (ZE) $2,000 1.50 11.50% Western Gas & Electric Co. (WGC) $1,500 1.15 20.00% Filtcom Corp. (FC) $3,000 0.60 22.50% Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Filtcom Corp. Western Gas & Electric Co. O Omni Consumer Products Co. O Zaxatti Enterprises
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
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Transcribed Image Text:Cheyenne 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)
Zaxatti Enterprises (ZE)
$3,500
1.00
18.00%
$2,000
1.50
11.50%
Western Gas & Electric Co. (WGC)
Filtcom Corp. (FC)
$1,500
1.15
20.00%
$3,000
0.60
22.50%
Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
O Filtcom Corp.
O Western Gas & Electric Co.
Omni Consumer Products Co.
O Zaxatti Enterprises
Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?
O Zaxatti Enterprises
○ Western Gas & Electric Co.
Omni Consumer Products Co.
Filtcom Corp.
If the risk-free rate is 4% and the market risk premium is 5.5%, what is Cheyenne's portfolio's beta and required return? Fill in the following table:
Beta
Required Return
Cheyenne's portfolio
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