4. An alternative solution of the diversification model. This problem illustrates an alter- native approach to solving the model in section 5.3.1 when period utility is logarith- mic. Note that eq. (42) implies that a representative individual from country n has a lifetime income equal to Y + V. the sum of current output and the market value on date 1 of uncertain future output. Given the agent's log utility function, a reasonable guess is that optimal date 1 consumption will be (Y+V). (89)