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11. Suppose that 1 U(e.) = Va. Also, Cov(Ac+, rt+1) is estimated at 0.16, and the payoff P+1 is either 1200 Ct or 1000

11. Suppose that 1 U(e.) = Va. Also, Cov(Ac+, rt+1) is estimated at 0.16, and the payoff P+1 is either 1200 Ct or 1000 with probability 0.5. The risk-free rate is 2%. Compute the asset price P.

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