You own $14,504 of Opsware, Inc., stock that has an assumed beta of 3.85. You also own $20,384 of Lowe’s Companies (assumed beta = 1.89) and $4,312 of New York Times (assumed beta = 1.17). Assume that the market return will be 16 percent and the risk-free rate is 7 percent.
What is the market risk premium?
Market risk premium %
What is the risk premium of each stock? (Round your answers to 2 decimal places.)
Opsware’s risk premium %
Lowe’s risk premium %
New York Times risk premium %
What is the risk premium of the portfolio? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Portfolio risk premium %