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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $12,000 or $38,000. The probability that the cash flow will

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $12,000 or $38,000. The probability that the cash flow will be $12,000 is 40%. 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?

A. $23585

B. $22321

C. $24643

D. $26038

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