Problems: 1. Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either Tk. 700000 or Tk. 1200000 with equal probabilities of 0.5 . The alternative riskfree investment in T-bills pays 7% per year. (a) If you require a risk premium of 9%, how much will you be willing to pay for the portfolio? (b) Suppose that the portfolio can be purchased for the amount of Tk.850000. What will be the expected rate of return on the portfolio? (c) Now suppose that you require a risk premium of 10%. What is the price that you will bo willing to pay? (d) Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell