Hi. I hope your day is going well. SO i have this assignment for class and I do not really understand the co concepts in the class well. And because of that I am finding it difficult to understand the assignment or to know where to begin with it, because of all the math involved. I am not looking for answers but i was wondering if you could please explain to me the topics asked in this assignment and what the questions are asking my to do because I do not really understand the topics when I learn them on my own because of the maths.. Here is the first question from the assignment:

Question 1 (Is greed enough?) A group of financial traders faces the risk of a market downturn and is considering investing in two financial assets. There is a single physical good, and assets pay in units of this good, which we will call 'dollars' ($). Asset 1 pays $1 in case the market keeps growing, but loses $1 otherwise. Asset 2 pays $2 in the first scenario, but loses $2 otherwise. You can assume that no other scenario is relevant for the trading period considered. No investor has capital to invest today, but each will receive some capital 0 i i w w s = > in all scenarios s tomorrow. No other asset is available to them for trade at the moment. Let k q be the price of asset k = 1,2 today.

a) Write down the traders' budget constraints today and tomorrow. Let 0 ( ) ln s s Ux x > = be the (expected) utility of any trader in this market. b) If 1 2 qqq = = > 0 what is the optimal investment each trader makes? c) Can 1 2 qqq = = > 0 be an equilibrium in this market?

"If the marginal utility of consumption today is positive, then the Law of One Price holds." d) Does the Law of One Price apply in this market? Explain how your conclusion relates to the statement above: Does the statement hold in this market?

After making a few phone calls, all traders are able to gain access to a call option on asset 2, with exercise price 1 and price c q . e) Can 1 2 qqq = = > 0 still be an equilibrium in this market? "If the Law of One Price holds, then the marginal utility of consumption today is positive." f) Comment on the validity of the previous statement: is it true or false?