Question $4.(10$ points$)$ The end of the year cash flows for a risky portfolio is either $$100,000$ with probability of $40\%,$ or $$250,000$ with probability of $60\%.$ The risk$-$free investment offers $3\mathrm{.}5\%$ return.

If you require a $4\%$ risk premium, how much would you be willing to pay for this portfolio?