Question: Asset 1) Solve the following problem. Maxx,y Vx+ Vy s.t. 12 x+y,x 20,720 2) Consider the baseline asset pricing model our slide. Phu'(Pb(1-95)+e) Prove that

Asset 1) Solve the following problem. Maxx,y Vx+ Vy s.t. 12

Asset 1) Solve the following problem. Maxx,y Vx+ Vy s.t. 12 x+y,x 20,720 2) Consider the baseline asset pricing model our slide. Phu'(Pb(1-95)+e) Prove that the function in equation (3) given by (Pb, 9b) = increases u'(ybqb+ez) (,q) with Pb, i, e. show that > 0, if utility function satisfies that for all x > 0, apb u"(x) 0

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