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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $80,000 or $200,000, with equal probabilities of 0.5. The alternative

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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $80,000 or $200,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 6%. a. If you require a risk premium of 9%, how much will you be willing to pay for the portfolio? (Round your answer to the nearest d amount.) Value of the portfolio $ 122,807 b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio b (Do not round Intermediate calculations. Round your answer to the nearest whole percent.) Rate of return 18 % c.Now suppose you require a risk premium of 12%. What is the price you will be willing to pay now? (Round your answer to the nearest dollar amount.) Value of the portfolio $ 118,644

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