Given the exponential utility function (u(x)=-frac{1}{a} mathrm{e}^{-a x}, a>0), and a normally distributed random variable (tilde{x} sim
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Given the exponential utility function \(u(x)=-\frac{1}{a} \mathrm{e}^{-a x}, a>0\), and a normally distributed random variable \(\tilde{x} \sim \mathscr{N}\left(\mu, \sigma^{2}\right)\), determine the risk premium.
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To determine the risk premium associated with the exponential utility function ux frac1aeax where a 0 and a normally distributed random variable tilde...View the full answer
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Related Book For 
Financial Markets Theory Equilibrium Efficiency And Information
ISBN: 9781447174042
2nd Edition
Authors: Emilio Barucci, Claudio Fontana
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