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Consider a risky portfollo. The end-of year cash flow derived from the portfolio will be either $115,000 or $270,000 with equal probabilities of 0.5 .

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Consider a risky portfollo. The end-of year cash flow derived from the portfolio will be either $115,000 or $270,000 with equal probabilities of 0.5 . The alternative risk free investment in T-bills pays 4% per year. 0. If you require a risk premlum of 4%, how much will you be wiling fo pay for the portfolio? (Round your onswer to the nearest whole dollar amount) b. Suppose that the portfolio can be purchased for the amount you found in (a). What will be the expected rate of return on the portfollo? (Round your answer to the nearest whole number.) c. Now suppose that you require a risk premium of 124. What price are you willing to pay? (Round your answer to the nearest whole dollar amount.)

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