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3 25 An individual investing has a utility function U-aW-bW where W is wealth and a,b are constant parameters. She can hold a portfolio of

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3 25 An individual investing has a utility function U-aW-bW where W is wealth and a,b are constant parameters. She can hold a portfolio of the following two assets: cash that has a net interest rate of 0, or a zero dividend share which has a price of 1 today and will have a price of P next period in state 1 with probability 0.5 and P in state 2 with probability 0.5. Assume that P>1 and P1 and P

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