Question: You own 15 000 of Opsware Inc stock that has a
You own $15,000 of Opsware, Inc. stock that has a beta of 3.8. You also own $10,000 of Lowe’s Companies (beta = 1.6) and $10,000 of New York Times (beta = 0.8). Assume that the market return will be 12 percent and the risk-free rate is 6 percent. What is the market risk premium? What is the risk premium of each stock? What is the risk premium of the portfolio?
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