Question: 11.6. Explain why the answer to exercise 11.5 differs from the answer in Example 11.2. 11.7. Start with the risk-adjusted discount rate formula. Derive the

11.6. Explain why the answer to exercise 11.5 differs from the answer in Example 11.2.

11.7. Start with the risk-adjusted discount rate formula.

Derive the certainty equivalent formula by rearranging terms and noting that b    PV.

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