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

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