Assume 
varies inversely with the square of 
. If 
when 
find 
when 
is 6.
Definitions:
Risk Premium
The additional yield beyond the risk-free rate that investors demand as a reward for taking on the risk associated with an investment.
Risk-Free Asset
An investment with a guaranteed return and no risk of financial loss.
Standard Deviation
Standard deviation measures the amount of variation or dispersion from the average in a set of data points, indicating how spread out the numbers are.
Real Rate of Interest
The interest rate that has been adjusted to remove the effects of inflation; reflects the true cost of borrowing.
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