Ari's utility function is =2L^0.1. , he is considering investing his money and has the choice to put his money into a risk-free investment that will pay him $5,200 next year or invest into riskier assets that are expected to earn $8,000 if the economy expands and $2,000 otherwise. There is a 35% probability of an expansion this coming year.

Where will Ari invest his money?

What is Ari's risk premium?