You Own $14,000 of Diner's Corp

question 53

Multiple Choice

You own $14,000 of Diner's Corp. stock that has a beta of 2.1. You also own $14,000 of Comm Corp. (beta = 1.3) and $12,000 of Airlines Corp. (beta = 0.6) . Assume that the market return will be 15 percent and the risk-free rate is 6.5 percent. What is the total risk premium of the portfolio?

• A) 11.645 percent
• B) 20.55 percent
• C) 23.905 percent
• D) 38.00 percent

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