1. Imagine two securities:
   1. a risky asset (e.g. shares in a public company) yielding on average 6.25% a year.
   2. A fixed income security (e.g. 12 month T-bill) with a guaranteed return of 2.75%

You are equally happy to invest all your wealth (w) in one or the other for 1 year. Show how to derive your risk premium (the price of risk).