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Consider the following two investment alternatives. FIrst, a risky portfolio that pays 15% rate of return with a probability of 40% or 5% with a
Consider the following two investment alternatives. FIrst, a risky portfolio that pays 15% rate of return with a probability of 40% or 5% with a probability of 60%. Second, a Treasury bill that pays 6%. The risk permium on the risky investment is________.
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