An investor has preferences represented by the following utility function: u(w) = 1/(ww*) , 2 where w* is a parameter. She can invest her wealth w in a risk-free asset with net return rf and in a risky asset (say a stock) with return r, such that Errf. Compute how the demand for the stock changes when a) the investor becomes richer; b) the excess return x = Er-rf increases. Explain your results carefully.