Exercise 12. Show that when U(x)-e risk averse investor will only urchase stocks if the expected return on the stock is higher than the expected eturn on the bond. In other words, k, 0 if and only if pu qd >1+r. Exercise 12. Show that when U(x)-e risk averse investor will only urchase stocks if the expected return on the stock is higher than the expected eturn on the bond. In other words, k, 0 if and only if pu qd >1+r