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2. Consider an investor who has vN-M expected utility with Bernoulli utility function u(F) = Y . Suppose thatthe investor's initial wealth is Y0-1000 and

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2. Consider an investor who has vN-M expected utility with Bernoulli utility function u(F) = Y . Suppose thatthe investor's initial wealth is Y0-1000 and that he or she is confronted with the lottery (100;-100;T). (1) Calculate the coefficients of absolute and relative risk aversion. (10 points) (2) Calculate the exact value of that makes the investor indifferent between accepting or rejecting the bet. (10 points)

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