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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $16,000 or $42,000. The probability that the cash flow will
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $16,000 or $42,000. The probability that the cash flow will be $16,000 is 30%. The alternative riskless investment in T-bills pays 3%. 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 dollar amount.) A. $28,585 B. $30,536 C. $25,893 OD. $32,264
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