Question: 3ob's utility function over total wealth m is given by Mm) = 16_1 SC 1_ 6 where 3 > 1 is a parameter. (a) (b)

3ob's utility function over total wealth m is given by Mm)

3ob's utility function over total wealth m is given by Mm) = 16_1 SC 1_ 6 where 3 > 1 is a parameter. (a) (b) (C) What is Bob's ArrowPratt measure of absolute risk aversion? What is the relationship between Bob's ArrowPratt measure of rel ative risk aversion and parameter 5? Bob has an initial wealth 'w > 0. Suppose that Bob can invest in two assets: a riskfree asset with gross return 7' = 1 and a risky asset with a gross return 77" that takes two values 9 > 1 and b

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