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A Treasury bill returns=6%. Asset E{retA} -12% with probability 40% or E{retA}= 2% with probability 60%. 1.Calculate risk premium? 2.Which of the following is true?
A Treasury bill returns=6%. Asset E{retA} -12% with probability 40% or E{retA}= 2% with probability 60%. 1.Calculate risk premium? 2.Which of the following is true? a.A risk averter would not invest in Asset A because it has a negative risk premium. b.A risk averter might invest in Asset A because she is rewarded with a risk premium. c.A risk averter would not invest in Asset A because she is not rewarded with a risk premium. d.A risk averter might invest in Asset A because investment choices are a matter of personal preference. type your answer here
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