(Advanced Project) In the lifecycle model, closed-form solution cannot be obtained when the wage and risky asset is not perfectly correlated

(θ = 1) or anti-correlated (θ = −1). When this is not the case, numerical methods have to be used to obtain the solution of the HJB equation. In this project, you will apply the method outlined in the technical appendix to find the numerical solution for:

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a. = 1 and compare it with the closed-form solutions; and b. -1 < <1 and verify the results in Table 14.4.