4. Mrs. Tatiana is willing to invest $75,000 in a risky portfolio. The cash flows derived from this portfolio after 2 years will be either $60,000 or $105,000 with probabilities of 40% and 60% respectively. Assume that the risk-free rate is 4%. What is the expected risk-premium of Mrs. Tatiana? *

a. 7.7%

b. 3.7%

c. 11.7%

d. 10.7%

e. None of the above