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1. Consider the Stock vs. Bond example from the Mainstream Finance handout. Suppose (r)=0.4,(b)=0.6,u(c)=ln(ct),=0.9. (In is the natural log. 1114 a) Compute the EDU of

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1. Consider the "Stock vs. Bond" example from the "Mainstream Finance" handout. Suppose (r)=0.4,(b)=0.6,u(c)=ln(ct),=0.9. (In is the natural log. 1114 a) Compute the EDU of c and c b) Suppose that, after forming the above belief , DM obtains the latest unemployment numbers. What method should she use to update her belief in light of this additional information

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