Elle holds a $5,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock’s beta,

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Elle holds a $5,000 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
Suppose all stocks in Elle’s portfolio were equally
weighted. Which of these stocks would contribute
the least market risk to the portfolio?
Perpetualcold Refrigeration Co.
Western Gas & Electric Co.
Flitcom Corp.
Tobotics Inc.
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.
Flitcom Corp.
Tobotics Inc.
Western Gas & Electric Co.
If the risk-free rate is 7% and the market risk premium
is 8.5%, what is Elle’s portfolio’s beta and required return? Fill
in the following table:
Beta
Required Return