Risk Premiums You Own $14,000 of Diner's Corp

question 5

Multiple Choice

Risk Premiums 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

---

Definitions:

Reputation Observation

The process of monitoring and assessing the perception of an entity's character or standing among its peers or in society.

Direct Behavioral Observation

A method of assessing individuals by directly watching their behaviors in natural or structured settings.

Narcissism

A personality characteristic involving arrogance, self-centeredness, and a lack of empathy for others.

Acquaintanceship Effect

A phenomenon that suggests the more people know each other, the more they will like each other.