What risk premium does Alice attach to the above return distribution? Compute the exact value, report two decimal places. What risk premium does

What risk premium π does Alice attach to the above return distribution? Compute the exact value, report two decimal places.

What risk premium π does Bob attach to the above return distribution? Compute the exact value, report two decimal places.

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Alice and Bob are both starting with a unit initial wealth: W = 1. They are looking to invest their entire wealth in an investment with two possible outcomes: a return of 55.7%, with probability 0.5, or a return of -55.7%. Alice evaluates the investment using a constant relative risk aversion utility function U (x)=x. Bob's utility is given by U (x) = ln (x).