Which of these stocks contributes least risk to portfolio

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Reference no: EM131899652

Conrad holds a $20000 portfolio that consists of four stocks. His investment in each stock, as well as each stock's beta is shown below:

Stock Investment Beta Standard Deviation

Aramis $3000 1.0 30%

Barrington $8000 1.8 52%

Carrow & Co. $5000 1.2 38%

Dartan Enterprise $4000 0.5 33%

Which of these stocks has the least amount of total risk?

Aramis

Dartan

Barrington

Carrow

Which of these stocks contributes the least risk to the portfolio?

Carrow

Aramis

BArrington

Dartan

The risk free rate is 5% and the market risk premium is 6%. What is the portfolio's beta and required return?

BEta Required Return

Conrad's Portfolio 1.52 12.26%

0.83 12.08%

1.46 12.62%

1.27 13.16%

1.64 12.20%

Conrad is thinking about realocating the funds in his portfolio. He plans to sell his stake in Dartan Enterprises and put that money into Barrington's Inc. Assuming the market is in equilibrium and Conrad Changes his portfolio, by how much will his portfolio's expected return change?

1.20%

1.56%

0.84%

1.44%

0.96%

Suppose an analyst believes that the expected return on Conrad's new portfolio is actually 14.80%. Does this analyst think the portfolio is undervalued, overvalued, or fairl valued?

Fairlyvalued

Overvalued

Undervalued

Reference no: EM131899652

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