Question: In a single risky security setting, define the wealth elasticity of demand for the risky security by: . * w a* (1) (a) Show that

 In a single risky security setting, define the wealth elasticity of

In a single risky security setting, define the wealth elasticity of demand for the risky security by: . * w a* (1) (a) Show that increasing, constant and decreasing relative risk aversions imply that n is respectively less than, equal to, and greater than 1. (b) Relate n to the behavior of the proportion of wealth invested in the risky security as wealth changes. In a single risky security setting, define the wealth elasticity of demand for the risky security by: . * w a* (1) (a) Show that increasing, constant and decreasing relative risk aversions imply that n is respectively less than, equal to, and greater than 1. (b) Relate n to the behavior of the proportion of wealth invested in the risky security as wealth changes

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