1. (10 points) You are considering investing $10,000 in a risky portfolio. The value of the risky portfolio in a year can be one of the following four scenarios. State probability Portfolio values Best 10% Good 30% Average 40% Recess 20% $13,000 $11,000 $10.500 $8,000 a) Your power utility function has a gamma value of 2. Find your certainty equivalent of the risky investment. b) If you have an opportunity to invest in the risk-free asset yielding a continuously compounding annual rate of 9%, determine your investment choice between the above risky portfolio or the risk-free asset. You must explain why