Given $100,000 to invest, what is the expected risk premium in dollars of investing in equities versus

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Given $100,000 to invest, what is the expected risk premium in dollars of investing in equities versus risk-free T-bills on the basis of the following table?

Action Probability Expected Return Invest in equities .6 $50,000

.4 $30,000 Invest in risk-free T-bills 1.0 $ 5,000

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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