Consider an investor with initial wealth W0 = 10, who has a vN-M expected utility with a bernoulli utility as u left parenthesis c right parenthesis equals fraction numerator c to the power of 1 minus gamma end exponent minus 1 over denominator 1 minus gamma end fraction

There is a risky asset with random payoff d with tilde on top as d with tilde on top equals open curly brackets table attributes columnalign left end attributes row cell 3 space w i t h space p r o b a b i l i t y space 0.5 end cell row cell 0 space w i t h space p r o b a b i l i t y space 0.5 end cell end table close

Which ones of the following statements are correct?

a.

If = 2, then this investors certainty equivalent of this risky asset d with tilde on top is 1.5.

b.

For this risky asset d with tilde on top, the risk premium required by the investor when = 0.5 is lower than the one required by the investor when = 2.

c.

If = 0.5, then this investors certainty equivalent of this risky asset d with tilde on top is 1.5.

d.

No matter what value is, this investors relative risk aversion coefficient is a constant.