QUESTION $15$

You own a porfolio that has $2,000$ shares of stock $A,$ which is priced at $$13\mathrm{.}87$ per share and has an expected return of $16\mathrm{.}48\%,$ and $4,000$ shares of stock $B,$ which is priced at $$9\mathrm{.}16$ per share and has an expected return of $7\mathrm{.}70\%.$ The risk$-$free return is $4\mathrm{.}32\%$ and inflation is expected to be $2\mathrm{.}87\%.$ What is the risk premium for your portfolio?

$8\mathrm{.}61\%($plus or minus $4$ bps$)$

$11\mathrm{.}48\%($plus or minus $4bps)$

$7\mathrm{.}77\%($plus or minus $4$ bps$)$

$7\mathrm{.}16\%($plus or minus $4$ bps$)$

None of the above is within $4bps$ of the correct answer