Consider the Following Two Investment Alternatives

question 47

Multiple Choice

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

• A) 1%
• B) 3%
• C) 6%
• D) 9%

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