Alice and Bob are both starting with a unit initial wealth: =1. They are looking to invest their entire wealth in an investment with two possible outcomes: a return of 52.2%, with probability 0.5, or a return of -52.2%. Alice evaluates the investment using a constant relative risk aversion utility function ()=. Bob's utility is given by ()=ln().

(a) For Alice, compute her coefficient of relative risk aversion, evaluated at her initial wealth.

(b) For Bob, compute his coefficient of relative risk aversion, evaluated at his initial wealth.

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

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