19. risk premia Return to the setting of Table 11.5, and the constant risk aversion story of U(w) = −exp(−ρ ·w), ρ = .00001. Why is the risk premium 3, 093 when the risks are independent but precisely the negative of this amount when the risks are perfectly negatively correlated? Hint:

what is the risk premium when initial wealth is 0 and the project will provide 50, 000 or 0 with 50 − 50 odds?