A simple decentralized economy with portfolio choice A typical household aims to maximize its expected discounted lifetime utility function given by: V. EtoB+U(C) where the period utility is U(cz) = 1 and the discount factor B = 170. denotes the rate of time preference and o is the coefficient of relative risk aversion discussed in class. The household receives exogenous income x in each period which can be either consumed (C.) or invested in physical capital (k.) or invested in one period bonds (b.) issued by the government. Letre - 8 denote the net rate of return to physical capital, where 8 represents the depreciation rate, and (R.) denotes the gross interest rate on one-period bonds. The household pays taxes only on earnings from physical capital assets at the proportional rate Txe, where 0