12. Use the table below to answer the questions that follow. Weak Normale Strong State of the Economy in 1 year: Probability: Price or Value Today Security Name ... we Ne Se Market $45 $382 $112 .352 .42 252 Cash flows in one year given respective state of the economy $1002 $02 $02 $02 $1004 $04 $0 $02 $1004 $7502 $1000 $14002 I a. What is the risk-free interest rate? (2 points) ? b. What is the market risk premium? (4 points) [ c. You have purchased an insurance product that will pay you $10,000 if the economy is weak next year. What is the price and the risk premium of this insurance? (4 points) 12. Use the table below to answer the questions that follow. Weak Normale Strong State of the Economy in 1 year: Probability: Price or Value Today Security Name ... we Ne Se Market $45 $382 $112 .352 .42 252 Cash flows in one year given respective state of the economy $1002 $02 $02 $02 $1004 $04 $0 $02 $1004 $7502 $1000 $14002 I a. What is the risk-free interest rate? (2 points) ? b. What is the market risk premium? (4 points) [ c. You have purchased an insurance product that will pay you $10,000 if the economy is weak next year. What is the price and the risk premium of this insurance? (4 points)