Mary holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well

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Mary holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is the following:
Mary holds a $10,000 portfolio that consists of four stocks.

1. Suppose all stocks in Mary's portfolio are equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
2.
Suppose all stocks in Mary's portfolio are equally weighted. Which of these stocks would contribute the least amount of stand alone risk?
3. If the risk-free rate is 7% and the market risk premium is 9%, what is Mary's portfolio BETA and required return?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Fundamentals of Investments, Valuation and Management

ISBN: 978-1259720697

8th edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

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