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Consider the following two investment alternatives: first, a risky portfolio that pays a 15% rate of return with a probability of 40% or a 5%

Consider the following two investment alternatives: first, a risky portfolio that pays a 15% rate of return with a probability of 40% or a 5% rate of return with a probability of 60%; second, a Treasury bill that pays 6%. The risk premium on the risky investment is __________.

a. 1%

b. 3%

c. 6%

d. 9%

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