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Consider a risky portfolio. The cash flow derived from the portfolio at the end of 3 years will be either $100,000 or $500,000 with equal
Consider a risky portfolio. The cash flow derived from the portfolio at the end of 3 years will be either $100,000 or $500,000 with equal probabilities of .5. The alternative risk-free investment in T-bills pays 4% per year. If you require a risk premium of 10%, how much will you be willing to pay for the portfolio? Round your answer to the nearest dollar.
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