You Own $14,000 of Diner's Corp

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