Math - Others

Linear Programming Solutions

You are considering a risky investment that you expect will either be worth 90,000 in 1 year, or
35,000, with probabilities of 0.65 and 0.35 for each outcome, respectively. You could invest in
riskless T-bills at 0.057. If you invest in this risky investment, you would expect to earn a risk
premium of 0.078
What is the expected return on this investment?
O 0.135
O 0.142
O 0.112
O 0.120
O 0.129