Investment Marginal Investment K1 K2 (return on production) return on market Marginal return on production Marginal return on market Excess return of marginal investment in production MV1=previous wealth ($14.860 initially) + PV of Excess Return on marginal investment int rate=10% or 0.1 Ageing wine bus,ness

1	0,5	$13,86	$5,38	$1,10	$1,53	$0,55	$0,98	$18,75
1,5	0,5	$13,36	$6,52	$1,65	$1,14	$0,55	$0,59	$19,29
2	0,5	$12,86	$7,46	$2,20	$0,94	$0,55	$0,39	$19,64
2,5	0,5	$12,36	$8,26	$2,75	$0,80	$0,55	$0,25	$19,87
3	0,5	$11,86	$8,96	$3,30	$0,70	$0,55	$0,15	$20,01
3,5	0,5	$11,36	$9,59	$3,85	$0,63	$0,55	$0,08	$20,08
4	0,5	$10,86	$10,15	$4,40	$0,56	$0,55	$0,01	$20,09
4,5	0,5	$10,36	$10,66	$4,95	$0,51	$0,55	-$0,04	$20,05
5	0,5	$9,86	$11,13	$5,50	$0,46	$0,55	-$0,09	$19,97
5,5	0,5	$9,36	$11,55	$6,05	$0,42	$0,55	-$0,13	$19,86
6	0,5	$8,86	$11,94	$6,60	$0,39	$0,55	-$0,16	$19,71

Answer the following questions: a) suppose the vintner invests 50 cents only, by how much does her/his wealth increases? Very Briefly explain 5pts suppose the vintner invests a second 50 cents (namely total is 1 but we are focusing on the second 50 cents) b) what is the MARGINAL return of this second 50 cents when invested into ageing wine? Very Briefly explain 10 pts c) what is the MARGINAL return of this second 50 cents when invested into lending? Very Briefly explain 10 pts d) between (b) and (c) which option will the vintner choose? Very Briefly explain 10 pts e) what is the wealth maximizing level of total investment? Very Briefly explain 5 pts