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4. Consider the noise trader model of DeLong et alia. (10) a. Derive the effect on the stock price pt if there is a fall

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4. Consider the noise trader model of DeLong et alia. (10) a. Derive the effect on the stock price pt if there is a fall in ll, the percentage of noise traders in the market; assume pt > p* > 0. Also in a sentence provide an economic explanation for the effect. (10) b. Derive the effect on the stock price pt if there is a fall in conditional variance 07. Also in a sentence provide an economic explanation for the effect. 4. Consider the noise trader model of DeLong et alia. (10) a. Derive the effect on the stock price pt if there is a fall in ll, the percentage of noise traders in the market; assume pt > p* > 0. Also in a sentence provide an economic explanation for the effect. (10) b. Derive the effect on the stock price pt if there is a fall in conditional variance 07. Also in a sentence provide an economic explanation for the effect

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