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Correct Answer is 50, Show the step wise answer With the initial wealth of 5000 , the payoff of the risky asset is 600 with

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Correct Answer is 50, Show the step wise answer

With the initial wealth of 5000 , the payoff of the risky asset is 600 with probability of 0.4, and 400 with probability of 0.6. What is the risk premium if utility is CRRA with gamma equals 2? (keep your number up to 2 digits.) Notice that the risk does not satisfy small risk property

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