Business, 16.03.2020 20:06 desi9750

Consider the following two investment alternatives: First, a risky portfolio that pays a 15% rate of return with a probability of 40% or a 5% rate of return with a probability of 60%. Second, a Treasury bill that pays 6%. The risk premium on the risky investment is .

a. 9%
b. 3%
c. 1%
d. 6%

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