Consider a risky portfolio. The end$-$of$-$year cash flow derived from the portfolio will be either $$80,000$ or $$215,000,$ with equal probabilities of $0\mathrm{.}5.$ The alternative riskless investment in T$-$bills pays $6\%.$

Required:

a$.$ If you require a risk premium of $12\%,$ how much will you be willing to pay for the portfolio? $($Round your answer to the nearest dollar amount.$)$

Value of the Portfolio

b$.$ Suppose the portfolio can be purchased for the amounfyou found in $($a$).$ What will the expected rate of return on the portfolio be$?($Do not round intermediate calculations. Round your answer to the nearest whole percent.$)$

Rate of return

$\%$