How would the following be solved...

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 5%.
a. If you require a risk premium of 10%, how much will you be willing to pay for the
portfolio?
b. Suppose the portfolio can be purchased for the amount you found in (a). What will the
expected rate of return on the portfolio be?
c. Now suppose you require a risk premium of 15%. What is the price you will be willing to
pay now?
d. Comparing your answers to (a) and (c), what do you conclude about the relationship
between the required risk premium on a portfolio and the price at which the portfolio will
sell?

6 answers

Hey bot, answer this for me.
If I need to take 500 hours to become fluent in Italian and I do 30 minutes each day, how many days will it take me to learn Italian?
It will take you approximately 1000 days to learn Italian if you study for 30 minutes each day.
If I need to take 500 hours to become fluent in Italian and I do 30 minutes each day, how many months will it take me to learn Italian?
If you study for 30 minutes a day to learn Italian and need a total of 500 hours to become fluent, it would take approximately 33.3 months or 2.8 years to achieve your goal.
If I need to take 500 hours to become fluent in Italian and I do 1 hour each day, how many months or years will it take me to learn Italian
If you study for 1 hour each day and need a total of 500 hours to become fluent in Italian, it would take approximately 16.7 months or 1.4 years (assuming there are 365 days in a year) to achieve your goal.