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 premium is 5.5%, what is Ariel’s portfolio’s beta and required return?
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 premium is 5.5%, what is Ariel’s portfolio’s beta and 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
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Question
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 premium is 5.5%, what is Ariel’s portfolio’s beta and required return? Fill in the following table:
|
|
Beta
|
Required Return
|
|---|---|---|
| Ariel’s portfolio |
Beta: 0.9825, 0.8351, 1.4738, 0.6583
Required Return: 9.40%, 557.00%, 733.20%,1,343.00%
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