2. Suppose that all investors in the market have a 2-period horizon and can either hold a perfectly liquid asset with a return of 1%, or an illiquid asset that costs 2% to trade in total. a) What return on the illiquid asset makes investors indifferent between the liquid and the illiquid asset? b) Now suppose there are also some longer-horizon investors who trade less frequently, say with horizon 20. What return do they get, net of trade costs, if they hold the illiquid asset? c) Now suppose that there is an even more illiquid asset that costs 3% to trade. Long horizon investors with a horizon of 10 periods specialize in holding this asset, which must be priced to make them indifferent between holding this 3%-trade-cost asset and another 1%-trade-cost asset with a return of 2.5%. What return must the 3%-trade-cost asset offer