2. An investor has preferences represented by a CRRA utility function: U(w). She is offered to invest all her wealth in a project which will give her total wealth wi W with probability 1-p. a) Compute the level of w such that she would be indifferent between accept- ing the investment or not for the cases in which her coefficient of risk aversion is 1. Discuss your result, in particular discuss how it varies with p, w1, W2. b) How do your results change if the coefficient of risk aversion is 2? c) Finally, suppose the coefficient of risk aversion is 2 but the investment provides wealth wi 0.5w or W2 = 2w. Will the investor invest in the project? 2. An investor has preferences represented by a CRRA utility function: U(w). She is offered to invest all her wealth in a project which will give her total wealth wi W with probability 1-p. a) Compute the level of w such that she would be indifferent between accept- ing the investment or not for the cases in which her coefficient of risk aversion is 1. Discuss your result, in particular discuss how it varies with p, w1, W2. b) How do your results change if the coefficient of risk aversion is 2? c) Finally, suppose the coefficient of risk aversion is 2 but the investment provides wealth wi 0.5w or W2 = 2w. Will the investor invest in the project