Consider a risky portfolio. The end$-$of$-$year cash flow derived from the portfolio will

be either $$210,000$ or $$600,000$ with equal probabilities of $\mathrm{.}5.$ The alternative risk$-$free

investment in T$-$bills pays $5\%$ per year.

If you require a risk premium of $9\%,$ how much will you be willing to pay for

the portfolio?

If the portfolio is selling at the price you found in part b$),$ what are the mean

and standard deviation of the holding period return of the portfolio?