Portfolio risk and return el 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 tabl Stock Investment Beta Standard Deviation Andalusian Limited (AL) $3,500 0.80 15.00% Tobotics Inc. (TI) $2,000 1.90 11.50% Water and Power Co. (WPC) $1,500 1.15 16.00% Makissi Corp. (MC) $3,000 0.50 28.50%
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- 8. Portfolio risk and return 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 Andalusian Limited (AL) $2,625 0.90 18.00% Tobotics Inc. (TI) $1,500 1.70 12.00% Three Waters Co. (TWC) $1,125 1.20 18.00% Makissi Corp. (MC) $2,250 0.60 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. O Tobotics Inc. O Andalusian Limited O Makissi Corp. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Three Waters Co. O Makissi Corp. Tobotics Inc. O Andalusian Limited 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 following table: Beta Required Return Cheyenne's portfolioPortfolio risk and 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 Investment Beta Standard Deviation Andalusian Limited (AL) $2,625 0.80 15.00% Kulatsu Motors Co. (KMC) $1,500 1.90 11.00% Water and Power Co. (WPC) $1,125 1.10 16.00% Makissi Corp. (MC) $2,250 0.50 28.50% Suppose all stocks in Emma’s portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Kulatsu Motors Co. Makissi Corp. Andalusian Limited Water and Power Co. 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. Makissi Corp. Andalusian Limited…Portfolio risk and 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 Investment Beta Standard Deviation Andalusian Limited (AL) $2,625 0.80 15.00% Kulatsu Motors Co. (KMC) $1,500 1.90 11.00% Water and Power Co. (WPC) $1,125 1.10 16.00% Makissi Corp. (MC) $2,250 0.50 28.50% 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: 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 0.9750 REQUIRED RETURN 0.8288 867.50% 0.6533 2,232.50% 1.4625 15.29% 1,895.96%
- 9. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 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 Atteric Inc. (AI) Arthur Trust Inc. (AT) Li Corp. (LC) Transfer Fuels Co. (TF) Investment Allocation O 0.9009 percentage points O 1.4322 percentage points 35% 20% 15% 30% 1.1550 percentage points O 1.3283 percentage points Beta 0.900 1.400 1.100 0.300 O Undervalued Standard Deviation Rafael calculated the portfolio's beta as 0.850 and the portfolio's required return as 8.6750%. Rafael 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 Transfer Fuels Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 23.00% 27.00% According to Rafael's recommendation, assuming that…9. Conceptualquestions on portfolio and stand-alone risk Darnell 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 Omni Consumer Products Co. (OCP) Kulatsu Motors Co(KMC) Three Waters Co. (TWC) Makissi Corp. (MC) Investment $1,750 $1,000 $750 $1,500 Beta Standard Deviation 0.90 1.30 1.10 0.60 18.00% 11.00% 18.00% 19.50% Suppose all stocks in Darnell's portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio is Makissi Corp. Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the least amount of unsystematic risk is Omni Consumer Products Co. If the risk-free rate is 4.00% and the market risk premium is 6.50%, then Darnell's portfolio will exhibit a beta of and a required return of9. Portfolio beta and weights 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% 1.400 42.00% Li Corp. (LC) 15% 1.300 45.00% Transfer Fuels Co. (TF) 30% 0.500 49.00% Brandon calculated the portfolio’s beta as 0.888 and the portfolio’s required return as 12.6600%. 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 Transfer Fuels Co. The risk-free rate is 6%, and the market risk premium is 7.50%. A. According to Brandon’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s…
- Portfolio risk and return 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 Andalusian Limited (AL) $2,625 0.80 9.00% Kulatsu Motors Co. (KMC) $1,500 1.90 12.00% Water and Power Co. (WPC) $1,125 1.20 16.00% Makissi Corp. (MC) $2,250 0.30 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? Makissi Corp. Water and Power Co. Andalusian Limited Kulatsu Motors Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Kulatsu Motors Co. Andalusian Limited Water and Power Co. Makissi Corp. If the risk-free rate is 4% and the market risk premium is 5.5%, what is Ariel’s portfolio’s…9. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 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% 0.600 38.00% Arthur Trust Inc. (AT) 20% 1.600 42.00% LI Corp. (LC) 15% 1.300 45.00% Baque Co. (BC) 0.400 30% 49.00% Rafael calculated the portfolio's beta as 0.845 and the portfolio's required return as 8.6475%. Rafael 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 Rafael's recommendation, assuming that the market is in equilibrium, how much will the portfolio's required return change? (Note: Do not round your intermediate…Beta Amt. Invested Stock A 1.03 $1,561 Stock B 0.98 $3,090 Stock C 1.37 $1,759 The table above contains the Betas and the amount invested in each stock in a given portfolio. Assuming that these are the only three stocks in the portfolio, calculate the beta of the portfolio.
- What is the beta of the portfolio held by Blue Co.? Blue Co. has portfolio fund consist of three stock s as follows stock invetsment beta monde 2,500,000 1.3 bdo 1,300,000 average pal 1,200,000 (.50)9. Conceptualquestions on portfolio and stand-alone risk Manuel 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 Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $1,750 0.90 18.00% $1,000 1.30 11.00% Kulatsu Motors Co(KMC) Water and Power Co. (WPC) Makissi Corp. (MC) $750 1.10 18.00% $1,500 0.60 19.50% Suppose all stocks in Manuel's portfolio were equally weighted. The stock that would contribute the least systematic risk to the portfolio Further, if all of the stocks in the portfolio were equally weighted, the stock that would have the is least amount of unsystematic risk is If the risk-free rate is 4.00% and the market risk premium is 6.50%, then Manuel's portfolio will exhibit a beta of and a required return ofAriel 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…