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You are considering a risky investment that you expect will either be worth 255,000 in 1 year, or 105,000, with probabilities of 0.45 and
You are considering a risky investment that you expect will either be worth 255,000 in 1 year, or 105,000, with probabilities of 0.45 and 0.55 for each outcome, respectively. You could invest in riskless T-bills at 0.043. If you invest in this risky investment, you would expect to earn a risk premium of 0.11 Given this information, what would you be willing to pay for this investment? 163,882 158,227 144,538 154,681
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