Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock,...
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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: Standard Deviation 12.00% Stock Andalusian Limited (AL) Kulatsu Motors Co. (KMC) Three Waters Co. (TWC) Makissi Corp. (MC) Investment $2,625 $1,500 $1,125 $2,250 Beta 0.90 1.70 1.20 0.40 0.40 12.00% 18.00% 25.50% Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Makissi Corp. Andalusian Limited Kulatsu Motors Co. O Three Waters Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? Makissi Corp. O Andalusian Limited O kulatsu Motors Co. Three Waters 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
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