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Problem 10-26 Risk Premiums (LG10-3) You own $14,820 of Opsware, Inc., stock that has an assumed beta of 4.04. You also own $19,760 of Lowes
Problem 10-26 Risk Premiums (LG10-3)
| You own $14,820 of Opsware, Inc., stock that has an assumed beta of 4.04. You also own $19,760 of Lowes Companies (assumed beta = 1.50) and $3,420 of New York Times (assumed beta = 0.81). Assume that the market return will be 14 percent and the risk-free rate is 6 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.) |
| Opswares risk premium | % |
| Lowes risk premium | % |
| New York Times risk premium | % |
| What is the risk premium of the portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places.) |
| Portfolio risk premium | % |
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