You Own $10,000 of Denny's Corp

question 73

Multiple Choice

You own $10,000 of Denny's Corp. stock that has a beta of 3.2. You also own $15,000 of Qwest Communications (beta = 1.9) and $15,000 of Southwest Airlines (beta = 0.4) . Assume that the market return will be 13 percent and the risk-free rate is 5.5 percent. What is the risk premium of the portfolio?

• A) 10.51 percent
• B) 11.49 percent
• C) 12.45 percent
• D) 13.62 percent

---

Definitions:

9/11 Terrorist Attack

A series of coordinated terrorist attacks by the Islamic terrorist group al-Qaeda against the United States on September 11, 2001.

Social Exchange

The theory that human relationships and social behavior are shaped by an exchange process aimed at maximizing benefits and minimizing costs.

Self-Disclosure

The act of revealing personal information to others, which can enhance intimacy or social bonding.

Passionate Love

A complex emotional state characterized by intense feelings of attraction and desire for another person, often accompanied by physiological arousal.