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tuetheturtle
24.09.2020 •
Business
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $55,000 or $300,000 with equal probabilities of 0.5. The alternative risk-free investment in T-bills pays 6% per year.
a. If you require a risk premium of 5%, how much will you be willing to pay for the portfolio?
b. Suppose that the portfolio can be purchased for the amount you found in (a). What will be the expected rate of return on the portfolio?c. Now suppose that you require a risk premium of 12%. What is the price that you will be willing to pay?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?
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Ответ:
Producers and consumers
Explanation:
Interactions between suppliers and consumers regulate economic activities in a free market economy. Demand and supply determine the goods and services to be produced and availed in the market. Suppliers represent the supply side, while consumers represent the demand.
Suppliers are profits motivated. They will supply goods and services that will generate high profits. These are the goods that consumers demand more.