Question: Consider an investor with utility function This investor has $ 7 , 0 0 0 , 0 0 0 in wealth If the investor has

Consider an investor with utility function
This investor has $7,000,000 in wealth
If the investor has no access to capital markets.
What is the value of her portfolio of projects?
How much should she consume today and how much next period?
Suppose now that a new bank comes to town, that allows the investor to borrow or lend at the interest rate of 10% per period.
What is the value of her portfolio of projects?
How much should she consume today and how much next period?
If the bank was forced to close, how much the government would have to pay the investor to leave her indifferent?

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