QUESTION 10

1. 17. Consider the following two investment alternatives. First, a risky portfolio that pays a 15 percent rate of return with a probability of 60% or a 5 percent return with a probability of 40%, and second, a T-bill that pays 6 percent. The risk premium on the risky investment is

   		A. 11 percent.
   		B. 1 percent.
   		C. 9 percent.
   		D. 5 percent.
   		E. none of these.