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Problem 7 Intro An investor is considering an investment in a risky portfolio. Based on his expectations, the end-of-year cash flow derived from the portfolio
Problem 7 Intro An investor is considering an investment in a risky portfolio. Based on his expectations, the end-of-year cash flow derived from the portfolio will be either $89,000 with a probability of 50% or $126,000 with the probability of 50%. T-bills have a yield of 6%. The investor requires a risk premium of 9%. Part 1 Attempt 1/10 for 10 pts. How much is the investor willing to pay for the portfolio, based on his required risk premium? 0+ decimals Submit
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