Question: both questions please. 6) An investor has a utility function U(x)=x+/4 for salary. He has a new job offer of $80,000 with a bonus. The

both questions please.

6) An investor has a utility function U(x)=x+/4 for salary. He has a new job offer of $80,000 with a bonus. The bonus will be 0, 10k, 20k, 30k, 40k, 50k or 60k with equal probability. What is the certainty equivalent of this job offer? 7) The Arrow-Pratt relative risk aversion coefficient is: H(x) = *U"(*) u(x) = U'(X) Show that the utility functions U(x)=In(x) and U(x)=yxy have constant relative risk aversion coefficients

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