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

 

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) $3,500 0.80 12.00% Kulatsu Motors Co. (KMC) $2,000 1.30 11.50% $1,500 1.15. 16.00% Western Gas & Electric Co. (WGC) Makissi Corp. (MC) $3,000 0.40 19.50% Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of standalone risk? Omni Consumer Products Co. Western Gas & Electric Co. Kulatsu Motors Co. Kulatsu Motors Co. Makissi Corp. Makissi Corp. Western Gas & Electric Co. Omni Consumer Products Co. If the risk-free rate is 4% and the market risk premium is 6%, what is Cheyenne's portfolio's beta and required return? Fill in the following table: Beta Required Return Cheyenne's portfolio 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) $3,500 0.80 12.00% Kulatsu Motors Co. (KMC) $2,000 1.30 11.50% $1,500 1.15. 16.00% Western Gas & Electric Co. (WGC) Makissi Corp. (MC) $3,000 0.40 19.50% Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of standalone risk? Omni Consumer Products Co. Western Gas & Electric Co. Kulatsu Motors Co. Kulatsu Motors Co. Makissi Corp. Makissi Corp. Western Gas & Electric Co. Omni Consumer Products Co. If the risk-free rate is 4% and the market risk premium is 6%, what is Cheyenne's portfolio's beta and required return? Fill in the following table: Beta Required Return Cheyenne's portfolio

Answer rating: 100% (QA)

a Least market risk is the lowest beta Makissi Corp b Lea... View the full answer