A and B

thank you !!

10. Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $10,000 or $20,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 2% per year. a. What is the expected cash flow from the risky portfolio? Answer: $ Show your calculation here. b. If you require a risk premium of 6% per year, how much are you willing to pay now to buy the risky portfolio? Answer: $ Show your calculation here