___ ___D_ ______ ___. 5. An investor with a total wealth of $100 is faced with the following opportunities. First, he may invest $100 now and receive $144 if there are good times, but receive $64 if there are bad times. The investor estimates that good times happen with 50% probabilitvI-le can also bu},r an investor newsletter whether good times or had times will occur. 1 (a) Draw the decision tree that illustrates the options available to the investor and the payoffs to the dierent options. Dene P as the price of the newsletter. T {b} If the investor is riskneutral with [HM] = M , where M is income, how much would he be willing to pa}r for the subscription to the newsletter? 5 {c} If the investor is riskaverse with ntilitj.r UfM) = M 0'5, where M is income, how much would this investor be willing to pa}r for the subscription to the newsletter? 4 {d} Suppose that the owner of the newsletter estimates that there are 75 riskaverse investors like those of part {c} and 25 investors like those of part(b}. If it costs zero to produce the newsletter, how should the newsletter be priced assuming {13} that the owner wishes to maximize the prots of the news letter and (ii) that this is the onlj.r newsletter available to investors